


SUPPLY 
and 
DEMAND 

Only Source of ValUw. 

A Discussion of the Money Question 



WmUlfllVI H- V Fr.RY. 
Chester, Pa. 



Z> \ 



y i 



-X 



SUPPLiY 
and 



DE|V[A|MD 



THE 



Only Source of Value. 



A Discussion of the Money Question 

— BY— 

V WILiLilfllVI H. BE{?t?Y, 

Chester, Pa. 



Single Copies, it^ cents; two for 2^ cents, postpaid. 
Lots of 100 for free distribution, at cost. 



COPYRIGHT, 1898. 



MORNING REPUBLICAN PRINT 
CHESTER, PA. 



^^vq^ 



^scfn 



13;)'Ui Introduction 



During the last Presidential campaign I harded to a friend 
a work on " Bimetalism " bj' Wharton Barker, with a request 
that he read it carefully. Some weeks afterward I asked him 
what he thought of it. He ans\.\er(:d with a sm'Ie that ", life 
was too short " for him to read a book like that. 

I knew that he was straining every nerve to make a living 
and to pa}' the interest on a mortgage which, if foreclosed, 
would absorb every shred of his property and rob him of the 
hard earned savings of a lifetime, and I hoped to show him the 
cause of his trouble and the remedy for it. He voted against 
independent Bimetalism, as I believe, in ignorance of the facts 
in the controversy. 

I have centered this discussion upon what seem to me to 
be the critical points in the case and have made it as brief as 
possible, though I trust not too brief for clearness, in the hope 
that my friend and other victims of the present system may 
find time to read it. 

The argument endeavors to show that a short supply of 
money has increased its value and reduced the price or debt- 
pajdng power of property and products. 

This insolvency of propertv deters men from producing it 
and enforces idleness, thus causing an irreparable loss to those 
who can least afford it. 

In the struggle to maintain prices trusts and combines are 
formed, strikes, lockouts, riots and bloodshed ensue, and an 
intensifying alignment of our people into "classes" results. 

Free competition in tho production of money will remedy 
this evil by giving to every man who wants to work a chance 
to do so, and the free and independent coinage of silver at i6 
to I with gold in the United States, is a just, safe and patriotic 
method of effecting this result. 

The facts which have compelled me to the conclusions 
reached, are set forth in the tables appended. They are taken 
from the latest publications (Feb 1898) of the United States 
Treasury, and from no other source. They are therefore reli- 
able. The facts as to the fall in prices as shown in Table I 
are confirmed in the experience of every citizen. 

I have arranged the statistical facts as to the Production, 
Coinage and Movement of Gold and Silver so as to emphasize 
the points of my argument- I believe that this set of tablfs 
will be found of great value to students of the question. 

Wha'ever of original thought may be expressed in this 
book, together with the compilation of the rest, I dedicate to 
the cans.' of humanity 

Mav God speed the right. 

WILLIAM H. BERRY. 



CONTENTS. 



CHAPrp:R I 

VALUE. 



Intrinsic Viilue— What is Value?— Supply and Demand — The 
Source of Value — Utility is not Value — Demand — Demand Resisted — 
Value may rise Indeftnitely— Fall in Value Limited by cost of Pro- 
duction— Skill and Advantage in Production — Automatic Reiiulalion 
of Values— Artificial Control of Values by Trusts- All Trusts and 
Combines Condemned — Improved Methods of Production— The Value 
of Labor. - 1-6 

CHAPTER II. 

A MEASURE OF VALUK. 

What Is it to Measure Value? — An Average Stami.ird — A Com- 
modity standard— Stability Required— Methods of Regulating the 
Standard— Labor not a Suitable Standard— Labor : Its Value and 
i^ebt-paylug Power— Units E?tablis!\ed by L.-ivv. - - - 7-i() 

CHAPTER III. 

THE AMERICAN DOLLAR OUR STANDARD. 

The Demand for Dollars— The Supply of Dollars— The Produc- 
tion of Dollars — The Dollar the Standard— Value and Price Contrast- 
ed— Per capita Circulation not a Test of Value— One Dollar as good 
as another— Discrimination destroys Parity. - - - 11-15 

CHAPTER IV. 

SUBSTITUTES. 

Gold and Silver Coin Insufficient— Substitutes for Dollars —Bank 
Notes— Character and Cost of Producing Subsiitutes— Substitutes 
Unreliable — Not Enough of Dollars— Eaormou-t use of Substitutes— 
The Limit of Substitution— A Difference in Substitutes. - 16-20 

CHAPTER V. 

THE VALUE OF GOLD AND SILVER. 

Recapitulation— The Value of Gold— The Value of Silver Prior to 
1S73— Parity under Free Coinage— Foreign Exchange as Affecting 
Parity— Different Coinage Ratios as Affecting Parity— Theory of Bi- 
raetalisai— Experience of Bimetalism— Importance of this Country 



IV CONTENTS, 

in the Past— Importance of this Country Now— No Reason for De- 
monetizing Silver in 1873— Demand for and Supply of Gold— The 
Present Vakie of Silver— Silver at par with other Commodities — 
The Effect of PVee Coinage of Silver. .... 21-30 

CHAPTER VI. 

THE TEST QUESTION. 

The Arithmetic of F'acts— Production of Silver— Present Prod at 
all Consumed- Increased Production— Prohahle Supply <>f Silver— 
The Demand for Money — The Immediate Demand for Silver — The 
(yurrent Demand for Money— Demand Unlimited — Our Debts Abroad 
—Our Present Needs— What of tlie Future?— Hon. A. .1. Bilfour on 
Standards— Trusts and Combines born of Falling Prices — Tne Present 
Inquiry. .-..- 31-41 

CHAPTER VII. 

THE EFFECT OF FALLING PKICES. 

Government VS. Private Regulation — Senator Hoar and Sh^'lock— 
The Owners of fixed debts in Go!d— The A<ents of these gold Own- 
ers— Officials who are hired— Euro pea M Cereal Consumers— Europe 
vs. United States— Our Loss their Gain— Loss to Farmers — Wheat 
and Silver — Prices have not fallen in silver-using Countries — Mexican 
vs. American — Disadvantage of Americans — England's use of Ameri- 
can silver in India— Who w^ants Bimetalisra? — Standard of Pros- 
perity. 42-51 

CHAPTER VIII. 

OBJECTIONS ANSWERED, 

oO-cent Dollars— Building Associations, etc. — Parity as Measured 
in Property — Maintaining Parity of Silver with Gold Money — Dis- 
crimination (Legal)— The Law — Discrimination in Defiance of Law — 
A False Pretense — The Pledgeof Government— Why not Change the 
Ratio? — There has been more Silver Coined since 1873 than Before — 
We want "Honest Money" — We want "Sound Money". 52 59 



T.ABLE I. — Prices of Leading Articles Produced and Manufactured in the 
United States as given in the Statistical Abstract of the United States 
for 1897, published in February, 1898. .... I 

TABLE II. — Movement of Silver Coin and Bullion. • • . II 

TABLE III. — Gold and Silver Coined in France Converted at j^i per 25 francs. II 
TABLE IV. — Production, Coinage and Relative Value of Gold and Silver in 

the world since 1792. ....... m 

TABLE V. — Production and Coinage of Gold and Silver in the United States IV 



CHAPTER L 

Value. 

Iiffrinsio Talsso What is Value 7— Supply and I>enian«l— The Sonrcf 
of Value— I'tiJity is not Value— l»einaii<!—l»enia8»«l Resisted— Value 
may rise indefinitely— Fall in value limited l»y eost oT Prodne- 
tion— Sliill and Advantag-e in Production— AHfoiuBatte Kesulation 
of Values— ArtiOeial Control of Values l>y Trnsts— All Trusts and 
Combines O^tndcmned-^Iuftproved Methods of Produetaon- The 
value of L<al>or. 

A confused and ofcen erroneous conception of the phe- 
nomena of value is current in the minds of many intelligent 
men, and since clear thinking on fundamental principles is 
necessary to an intelligent conclusion we propose to discuss 
this question briefly, first : 

The persistent chatter of the ne\vsp.ipers, and other would- 
be teacher,-, about the 

•* intrinsic Value " 

of a gold dollar, and the universal habit of comparing all 
other values to that ot gold leads many to suppose that the 
value of gold is inherent and cannot change, and in order to 
free our minds of this error let us first enquire 

What is Value? 

We answer that the value of an article is what it will 
brinji in the open market, or in other words, its " purchasing 
power" or " power in exchange," and thus understood it is 
not and cannot be " intrinsic " or inherent in gold or in any 
other substance. 

As the altitude of a balloon is fixed at a point where the 
force of gravity is balanced by the buoyancy of the atmos- 
phere, so the value of everything in the world is fixed by the 
contending forces of 

Supply and Demand 

and at a point where these forces balance each other. 

The foolishness of referring to the " intrinsic " height of 
a balloon is at once apparent, and to speak of the " intrinsic " 



-2 VALUE. 

value of anything is equally absurd. Value refers to the po- 
sitioti of a thing and not to any quality it may posses-. 

The Source of Value. 

Value, or "Power in Exchange" is not onXy ^xed or 
regulated by the contention of Supply and Demand, but it is 
actually created by it, and does not and cannot exist in the 
absence of it. 

Utility is not Value. 

It is an error to suppose that because of certain intrinsic 
qualities an object is useful or desirab e, and is therefore valu- 
able. Nothing could be more misleading. As an illustration, 
take the air we breathe. Its intriiisic qualities render it usf- 
ful, desirable and even necessary to every human being, and 
yet it is absolutely valueless. One cannot get anything in ex- 
change for a bushel or for a ton of it. Her*., then, is the spec- 
tacle of an exceedingly useful thing entirely without value. 
While on the other hand there are some things that one might 
mention which are quite valuable and are not only useless but 
are positively harmful and destructive in their effects. The 
victims of the alcohol or opium habit will give anything they 
possess on earth in exchange for these drugs, while it is clearly 
seen that they are rapidly destroying those who use them. 
And so we see value where there is no utility, as well as utility 
where there is no value. 

" Demand ". 

The qualities, inherent or otherwise, (they may be and 
often are purely imaginary) in an object, tend to make it de- 
sirable and to create a demand for it, and it is important to 
notice that, the more uses to which an article can be put, and 
the more imperative the necessities which these uses supply, 
the greater and the more imperative will be the demand for it. 
But however broad and imperative the demand may be, there 
will be no value whatever unless the demand is resisted by a 
short supply, and the contention is set up between tho.'-e who 
have it and those who want it. The life-sustaining qualities 



VALUE. 3- 

of air, for which there is no substitute, rentier it absolutely 
necessary lo every man and an imperative demand arises from 
every quarter, and yet it his no value because the demand is 
not resisted. The supply is everywhere abundant. 

Demand Resisted. 

Take the case of water, and for the same reasons the de- 
mand is universal and imperative, but in certain sections the 
supply is limited, and the demand is resisted to a degree that 
gives rise to value, and water is "sold" or exchanged for other 
things. 

Values May Rise Indefinitely. 

As the resistance of short supply in the pre-;ence of im- 
perative demand increases, the value (of water for instance) 
ri-es uncil in many places it is considerable, while to the fam- 
ishing survivor of shipwreck or the bewildered t'aveler in an 
arid desert it may become infinite. 

Any ci'cumstance, providential or man-made, which af- 
fects the supply whih- the demand remains the same will af- 
fect the value of anything, and any circumstance that affects 
the demand while the supply remains the same will affect the 
value with equal certainty. 

The rise in value-; due to a short supply is not controlled 
or limited by the effort <r sacrifice necessary to produce or 
distribute the article value 1 (cost of production.) It is easy 
to conceive that one might be willing to give all his earthly 
possessions for a quart of water which may have cost its 
owner nothing. 

The Fall in Values is Limited 

by the cost of production. In the presence of a constant de- 
mand an over-supply of an article would reduce its value to 
nothing (as in the case of air) or, if labor or sacrifice were re- 
quired in its production, to a point where its producers would 
cease to find a profit, at which point production would neces- 
sarily cease until the supply was reduced and the value raised. 



4 VALUE. 

Skill and Advantage in Production. 

Under the stimulus of demand for a new article, or the 
enlarged use of an old one, the value may rise so far above the 
cost of production as to enable persons without skill and with 
crude implements and unfavorably located to engage in its 
production, but as soon as the demand is fully met the value 
will begin to fall and those who are producing under the 
greatest disadvantage will be first compelled to cease and 
each in turn until finally only those of consummate skid a.id 
})erfect equipment can continue. 

In the struggle for existence as between these (the fittest) 
the value may temporarily fall below the cost of production, 
but ultimately enough and only enough of producers will sur- 
vive to supply the demand at a reasonable profit. 

Automatic Regulation of Values, 

The foregoing, briefly stated, are the universal laws of 
commerce, and may be depended upon through all time to 
govern and regulate all the phenomena of value. The cost of 
production will mark the lowest permanent range of values , 
and competition, if left free, will be a guarantee against con- 
tinued extortion. 

Artificial Control of Values 

■by means of trusts and combines is in the nature of a con- 
spiracy and works an injustice to all producers outside of the 
pool. Such effort can only be successful on the assumption 
that the producers who combine to restrict production will also 
conspire to deter others from entering their field with new 
capital and equipment. This is done by temporarily lower- 
ing prices when the new enterprise is started, thus forcing it 
to cease or sell out to the combine. When the competition is 
destroyed, prices may be again advanced. 

The manipulators of certain trusts or combines which are 
incorporated and whose stocks are listed in the market, are 
able by speculative trading in their own stock, tomakemone}^ 
for themselves while selling their product at less than cost. 

Some of the most notorious combines of the present are 



VALUE. 5 

able by controHini^ tlie raw materials and the iiiean-i of rrms- 
portation to so discriminate against their competitors as to 
make their business improfiiaule. 

Ail Trusts and Combtnes Condemned, 

Nothing is more certain than that all sucli combinations 
a-e prejudicial to the general welfare, liecause in the nature- 
of the case they restrict proiiajtion and encourage or enf>)rce 
idleness, and if practiced by aU woul! result in the ultimate 
stagnation of all enterprise. 

1 11 proved Alethods oi Production. 

The cost of producing anything includes all the materials 
of every kind that are used in its cotistruction as well as all 
th eeffort, time and sacrifice that are involved in its creation 
and distribution to the point of consumption or ultimate stor- 
age, and since civilized man is poyressive and is continually 
adding to his experience and improving the direction and char- 
acter of his efforts, as well as the tools and appliances with 
which he works, a corresponding red notion in the cost of pro- 
ducing commodities, as measured in Jnnnari toil, occurs. 

In order to encourage the improvement of methods and 
machinery of production the government justly gives to those 
who make the improvements an exclusive privilege to use them 
for a period of years (17 in this country), after which it is 
thrown open to the public and in competition all may inherit 
the benefits of the march of improvement. 

Under fair economic conditions this should and would re- 
sult in a constant increase in the rewards of toil, and the value 
of labor would constantly rise as measured in any and all of 
its products. 

The Value of Labor 

is just as certainly due to the law of supply and demand as 
are other values, but since every laborer is a consumer and 
can furnish a demand for the product of his own toil, or its 
equivalent in the product of his neighbor, there cannot pos- 
sibly be an over-supply of labor if the opportunity to labor 



6 VALUE. 

and to exchange products i'^ not restricted, and therefore the 
statement that the value of labor should constantly rise as 
compared to the value of its products is certainly true, and 
that the value of all products as compared to labor should con- 
stantly fall is equally true. 

If there be a product to which the improved methods and 
skill in production has not been and cannot be applied, and 
the demand for which continues, its value will range above 
that of its fellows and tend to keep pace with the value of 
labor, but such instances are extremel}' rare if, indeed, any 
exist, so that we have every reason to expect th^t the wages 
of the laborer will continuallj^ rise as measured by his pro- 
ducts and in proportion to his increased ability with improved 
tools to produce them. 



CHAPTER II, 

A Heasure of Value. 

What Is it to ni*'sis(«r«» Val«»'?— An Av^-rag-c Standartl— A Coiiiiiiodity 
Standard— Stability Iteqnired— Motliods of R4>jK-n]ati]ii<; the Stand- 
ard—Labor not a unliable Standard— I^abor: lis valaac and d«>bt- 
payin^ l»ow«?r— Units Established by Lian-. 

In the exigercies of commerce it becomes necessiry to 
have some means of comparing or measuring values, ju-^t as m 
the mechanic arts it becomes necessary to compare weights 
and extensions, and as we establish the 'pound", which is 
the force with whicli a certain quantity of metal is attracted 
toward the earth under certain conditi(Mis, and the " yard ", 
which is the length of a pendulum which will vibrate in a cer- 
tain length of time under certain conditions, as the basis of 
our physical comparisons or as " units " in the terms of which 
our statements of weight and extension may be expressed and 
our records kept, so also must we establish a unit of value in 
the terms of which our records of value may be made and kept. 

What is it to Measure Value? 

In measuring or recording the value of an article we do 
not undertake to say how far above or below the cost of pro- 
duction it m;^y be, but our purpose is to state its position as 
related or compared to other things, and in order to do this we 
must by common consent select or create a certain thing as a 
standard and state that the thing to be located or valued is 
above or below the standard as the case may be. 

An Average Standard. 

It is urged by some that a line should be drawn striking 
an average of the values of all the leading articlts of commerce 
and that our records should refer to this and our units be based 
upon it, and there is no doubt that a fairly just measure could 
be thus obtained ; but we think that the difficulty of artificially 
fixing and regulating such a standard would be greater than 
the advantage gained, for the necessity of a circulating medium 



8 A MEASURE OF VALUE. 

to be used as money and represent the unit quantity of average 
commodity would still remain, and unless redemption on de- 
mand was provided this form of currency would " fluctuate " 
in value under the stress of supply and demand the same as 
any other kind of money. 

A Commodity Standard, 

We think that the present method of selecting or creating 
a tangible commodity to which all other commodities shall re- 
fer for comparison will be found most s;itisfactory, for the 
reason that it would be produced by labor under free compe- 
tition and if the value rose, production would be stimulated 
and the rise checked ; if it fell, the cost of production would 
check producers who wer-c- poor!)- equipped and restore equi- 
librium. 

Stability Required. 

The standard however established should be as stable a** 
possible, and the diflicultv of cheating a just standard is not 
small ; in fiict it is impossible, and we must be content with 
a reasonable approach to exact jusiic-^. The difficulty grows 
out of the fact we have stated, that whatever we may create 
or select as our standard will itself be subject to a varying 
influence of supply and demand and will rise and fall in value. 
Slight and temporary changes in the value of the standard, 
like the element of friction in mechanics, may and in the na- 
ture of the case must be endured. 

Methods of Regulating the Standard. 

To regulate the standard and prevent a wide and perma- 
nent divergence from the average of values two methods are 
proposed : First, the artificial control of the supply by the 
creating authority ; and second, the automatic regulation of 
the supply by free competition in production under the gen- 
eral laws of trade. The first contemplates a comparatively 
costless creation like paper money produced by the creating 
authority as its judgment may dictate. We think this method 
quite possible, but not the best for reasons that will appear as 
we proceed. 



A MEASURE OF VALUE. 9 

Labor not a SuitabSe Standard. 

It is contended b}' some that laborer "human toil" is 
the only true measure of value, and if the concrete result of 
toil is meant, such as a ton of iron or a yard of cloth, we will 
not dissent , but nothing is more certain than the impossibility 
of establishing a just standard directly from labor, such as a 
■'day's work" or a "month's service". No two persons 
will give the same result from the same hours of service. 
Differences in capacity make it impossible, and differences in 
disposition as to industry make it unlikeh/, even if possible. 
If, however, we take a given amount of commodity of stand- 
ard perfection, such as a ton of iron, then he of the greater 
capacity and industry will justly reap a corresponding reward 
in its production, so that at the last analysis the commodity 
standard finally and justl)^ rests on labor. 

But again, one of the prime uses of a standard unit of value 
is to keep a record of debts to be paid in future, and if a debt 
was made payable twenty- five years from date, in, say " 1000 
hours of service", the march of improvem.ent in skill and 
appliances would give to the creditor at the end of ihe time a 
larger return than was his due, for the " service " due him is 
the service of a period twenty-five years jiast, which was less 
valuable than is the service of the present. The creditor is 
entitled to tlie increment in tlie efficiency of his own efforts 
during that time, but not to that of his debtor. 

The commodity standard gives to the creditor his just 
due, and to both debtor and creditor the just reward of their 
efforts to improve the effectiveness of their labor, and also 
discriminates justly in favur of the able and industrious 
workman. 

Labor: Its Value and Debt=paying Power. 

We digress a little from the line of our argument at this 
point to expose a sophistry that has misled many per^ons in 
considering this question. It is affirmed that the wage^ of 
labor as stated in money, " are as high now as ever they were, 
and that the money earned will buy twice as /xiuch as formerly 
and therefore the wages of labor have been doubled", and 



^O A MEASURE OF VA.LUE. 

without Stopping to investigate and test the first part of this 
questionable statement, but admitting for the sake of argument 
•that the whole statement is true, we call attention to the fact 
that although the value of labor as measured in its products 
may have increased twofold, its debt-paying power has not in- 
creased at all, and the debt-owning class has been able to reap 
all the benefits of the march of improvement at the expense 
of the laborer who, at the last analysis, must pay all the debts 
and interest charges, and with twice as much of the fruit of 
his toil as was contemplated in the contract. 

This of course is not true of debts of recent contraction, 
but as the great body of our debt is of several years' standing 
it is generally speaking true, and will be true entirely if the 
present condition continues. 

Units Established by Law. 

In every civilized country the various units of measure- 
ment are of necessity established by law, and with sole regard 
to the convenience of its own people. 

The unit of weight in this country is authoritatively fixed 
and called a " pound ", and is carefully defined as the force 
of gravity upon a certain quantity of metal under certain in- 
ternal and external conditions. 

The unit of value in this country is the American dollar. 



CHAPTER III. 

The American Dollar our Standard. 

The Demand for Dollars— The Supply of Dollars— The ProdurtiOH 
of Dollars— The Dollar the Stainlard— Valne and Price Contrast" 
ed— Per capita Circulation not a Test of Value— One Dollar a» 
Clood as Another— Discrimination Destroys Parity. 

The unit of value in this country was created and fixed 
ill 1792, and was called a " Dollar", Its value or purchasing 
power was fixed by the Law of Supply and Demand, as are all 
other values. 

The Demand for Dollars 

grows out of the fact that they are made by law a legal tender 
for all debts public and private in this country. Because of 
this quality tliey perform all the functions of money in the 
field of commerce and are in universal, imperative and per^ 
petual demand. 

The Supply of Dollars 

was left open to competitive production under the law which 
provided for the free and unlimited coinage of silver on private 
account at the rate of 371 j^ grains of pure silver to the dollar. 
The law distinctly stated that the dollar or unit should 
consist of 37 1 X grains of pure silver and has never been- 
chamed in this particular. It also provided for the free coin- 
age of gold into multiples of the dollar at the rate of 24^ 
grains of pure gold to the dollar. The amount of gold in a 
dollar has been changed twice since, and the free coinage of 
silver was suspended in 1873. 

The Production of Dollars, 

The production of one or the other of these commodities 
is the only way in which an individual has ever been permit- 
ted to manufacture money, and since 1873 it has only been 
possible by producing gold ; but the government from time to 
time has exercised its constitutional right to "coin money" 



\2 THE AMERlCAiN: DOIXAR 

of other substances such as nickel and copper, and to print it 
on paper. In 1861, $6o,ooo,<'00 of paper money was issued, 
which was a full legal tender redeemable in coin, and many 
millions more of partial legal tender quality has been issued 
since. Under the Constitution the States are restrained from 
making anything but gold and silver a legal tender, so that 
the only source of legal tender paper money is the general 
government. National Bank notes are issued under the super- 
vision of the general government and are receivable for public 
dues, but are not a legal tender as between individuals. 

It must be carefully noted that neither gold or silver or 
paper is or can be " money " until it is stamped by the gov- 
ernment into a "dollar" or some fraction or multiple of a 
dollar, and we repeat with all possible emphasis that the value 
of a dollar is due simply and only to the fact that the laws of 
this country give it the exclusive power to pay debts public 
and private in this country and thereby creates an imperative 
demand for it which is resisted by a more or less limited sup- 
ply, and hence it has value. If the supply of dollars is in- 
creased or diminished in the presence of a fixed demand by 
any means whatever, the value or purchasing power will fall 
or rise in response, and if the demand should vary in the pres- 
ence of a fixed supp'.y a like result would follow. 

The Dollar the Standard. 

Let us clearly understand then that it is the " dollar ", 
•considered as a manufactured commodity, and not the rav/ ma- 
terial of which it may be made that is our standard of value, 
and that the demand for " dollars " and not the demand for 
the materials of which they are made gives value to our 
■money. 

We now have some $500,000,000 of silver dollars which 
are as valuable as our gold coins, and yet the silver in them is 
worth less than half as much as the dollar. The gold in our 
coins is of course worth as much as the coin because gold may 
be coined into money free of charge to the holder. The state- 
ment that our silver dollars are ' ' redeemable ' ' in gold dollars 
and are therefore as valuable is not true. The law states, and 
the official declarations of the Secretary of the Treasury also, 



OUR STANDARD. tj 

t'hat '■* silver dollars are standard coins and are not redeem- 
able". 

We will discuss the value of gold and silver bullion later. 

Value and Price Contrasted, 

It is necessary to make a broad distinction between the 
value and tile debt-paying power of a dollar or anj^thing else. 
The debt-paying power of a dollar is fixed by law and is en- 
tirely independent of the number in existence, the demand for 
them or for the material of which they are made, and it can- 
not change as long as the government that makes it is in force ; 
but its value or "purchasing power" will depend upon the 
number of dollars offeed in exchange as compared to the de- 
mand for them. 

The value of a coaimodity is its purchasing power as com- 
pared to all other commodities ; its "price" is its value as 
compared to money alone. The price of a commoditj'- is there- 
fore its debt-paying power, and it is quite clear that a com- 
modity might maintain its "value" and lose its debt-paying 
power, and vice versa. This is in fact always the case when 
the value of money changes. If the value of money rise, or 
its power to purchase commodities increase, the power of com- 
modities to pay debts must decrease in the same proportion ; 
and if the power of monej^ to purchase decreases the debt- 
pa3dng power of property must increase. 

This is the most important consideration in the money 
question and will be discussed later. 

Per Capita Circulation 

is not an index of the value of money in any sense, for it sim> 
ply shows the possible supply and does not indicate the de- 
mand. It is clear that as an individual may require more 
money at one time than at another, so the community may 
also. The per capita supply of horses in Chicago was prac- 
tically the same the day before the great fire as it was during 
the conflagration, and yet the demand for horses became so 
great that their value rose enormously in a single day, and 
the fact that the value of horses rose is proof conclusive that 



14 THE AMERICAN DOLtAR 

there were too few horses in the city ; and if it appears that 
the value or purchasing power of a dollar is rising it is proof 
conclusive that there are too few dollars, even though at the 
same time it may be true that there are twice as many dollars 
per capita in circulation as formerly. 

One Doflar as Good as Another. 

So long as the service thcit dollars of different materials 
will perform for their owners is identical, their value will re- 
main the same ; but if for anj^ reason dollars of one kind be- 
come more desirable than those of another and the supply is 
not increased, they will become more valuable. 

The demand for dollars as we have seen is due entirely to 
the fact that the fiat of this government has made them the 
in>^truments with which debts may be paid in this country, 
just as postage stamp- are in demind because they are the in- 
struments with which postal -ervice may be secured. 

Men need "dollars" with which to pay debts, either 
prospective, of immediate contraction, as in effecting current 
exchanges or for deferred pavraents, £ind/or no other purpose . 
One mav wish to make a ring or other ornament of gold, but 
he does not need a " dollar " for that purpose ; a piece of gold 
that has never been in the mint will do as well, and if he has 
a "dollar" and decides to make a ring of it he will in sc 
doing destroy the dollar the moment be effaces the government 
stamp, and cannot compel bis creditor t ) receive it He may 
wish to make a silver spoon, but he does not need a " dollar "■ 
for that purpose ; other silver will do as well, and if be use a 
ddllar for the purpos^e he will destroy the dollar and cannot 
compel his creditor lo receive it, although the labor upon it 
may have trebled or quadrupled its cost. 

A man may wish to purchase goods or to pay a debt (settle 
a balance) in a foreign country, but be does not need "dollars" 
for this purpose. American dollars are not money outside of 
our own boundaries. It is irue, that onr dollars of different 
kinds (i aper as well as coin) are received at par with each 
other in limited quantities by our foreign neighbors, but it is 
only because they can be returned to us at par. Their debt- 
payi -g power in this country and this alone, gives them value 



OUR STANDARD. T5 

in other countries. Tliere is no international money, nor can 
there be, for there is no international government to create it, 
and if one wishes to settle a balance in a fore'gn country h.: 
must purchase the money of that country with his pr perty or 
his American money. 

For all the purposes of money, therefore, any American 
dollar of full legal tender quality, is as good as any other 
American dollar of the same legal quality, and one would lie 
foolish to give more of his property for one than for the other 
If one wanted gold or silver for any purpose it might be more 
convenient to buy dollars made of either m^-tal than to seek 
for other bullion, but this demand would not be fir " dollars," 
but for the metal of which the dollars were made- This dis- 
tinction is important and should not be forgotten. 

Discrimination Destroys Parity. 

The first $60,000,000 of paper money issued during tlie 
war was full legal tender money and would do anything for 
its owner that any other money would do, and although the 
government was no more able to redeem it in coin on detnand 
than it was to redeem its other issues, it remained at par with 
•coin all through the war. 

The subsequent issues of paper money paid the soldiers 
and all other debts b tween individuals, but would not par 
"duties on imports or interest on the public debt. The.se obli- 
gations being payable only in coin or in demand notes of the 
iirst issue, a special and imperative demand for these forms of 
money was created which enabled their owners to demand a 
premium for them. 

This is the only reason for the premium on coin during 
the war, for there never was a moment during the war when 
there was a shadow of a doubt as to the .solvency of the North. 
The complete success of the Southern arms would not have 
■affected it, for their secession would not have led to the repu-^ 
diation of a single dollar of our Jiational debt 

Discrimination alone was the cause of it and a frightful 
Injustice was by this means perpetrated upon the soldiers and 
every other citizen of this country which has never been popu- 
larly understood, but it is not 01 r purpose to discuss it here ; 
•it is simply mentioned to show how the law by discriminating 
in favor of one kind of dollars made them more valuable than 
another kind of dollars. 



CHAPTER IV. 

Substitutes. 

fiaM nnd Silver Coin Inssiflfieienl—SiibsJieEtfes for Dollars-Kanfo 
jVotes— Character wnd t'ost of Prodweiiiff Substitotes— Substitutew 
I'lirclialjle— Ntrt Enosi!K»» »<' I>oIlars— Enormeus Use of Substi' 
tutes— The I.Smit Of SmbHtitatJort— A Difference In Sab»titutes, 

Gold and Sliver Coin Snsofficietit. 

There has never been a time since the adoption of the 
•' dollar " as the standard of value in the United States when 
there has been enough of silver and gold presented foT coinage 
to suppi}' the people with a sufficient number of dollars with 
xvhich to conduct their business. If all the gold and silver 
that has been coined in all the mints in the world since the 
United States mint \v is established had come into and re- 
mained in this country to be coined into dollars we should noi: 
have had enough to meet the necessities of our people. 

All the nations of the world use silver and gold as money „ 
but if the money-using people of the world were confined tC' 
the use of such money to the exclusion of all other forms or 
substitutes, the demand v;ould be so great as to raise its value 
or purchasing power far above its present iX).iition. 

Substitutes for Dollars. 

It is not only true that the demand for dollars has been 
sufficient to keep paper dollars of full legal tender power ar. 
par with coin, but numerous "substitutes for dollars'" in 
various forms have been resorted to to supply the necessities 
of trade. 

Bank Notes. 

Treasury notes, checks, drafts, clearing house certificates 
and numerous other credit instruments pass from hand to 
hand, and while none of them are money in the true sense of 
the term but are rather promises to pay money, by performing 
the principal functions of money, they are in demand and as 



StTBSTrTUTES'. ly 

long as the faith of the local public in the solvency of those 
who utter them is maintained, they remain at par with real 
money and to the extent to which they are able to perform the 
work of money they relieve the demand for money and thus 
reduce its value. Horses were for many years the principal 
source of power for local transportation and locomoiion, and 
the value of horses was fixed by the available supply as meas- 
ured against the demand. Electricity and the bicycle have 
recently entered the field as substitutes for horses, performing 
some of the services for which horses were used as well or 
better than the hoise itself. This relieved the demand for 
horses and their value declined. A recent statement of Comp 
troller Eckles declares that 90 per cent, of our business trans- 
actions are effected with these substitutes for money and only 
10 per cent, with actual money, and still the supply of money 
has been so short that its value or purchasing power has 
doubled in the last twent3"-fi\e years. 

Character and Cost of Producing Substitutes. 

The production of electric railways and bicycles involves 
the expenditure of labor and sacrifice, and while their intro- 
duction as a substitute for horses has worked a hardship to 
the owners and producers of horses labor has been largely em- 
ployed in thi.i UfW field, and great benefits have been derived 
by those engaged therein — benefits which equal or surpass the 
evils suffered by the horse producers, and the great body of 
the people who are engaged in neither of these pursuits are 
bentfited by the general advance of improvement and the vol- 
ume of business created. 

The production of Bank Notes and other substitutes for 
money costs practically nothing in labor and sacrifice. No 
one is employed in their manufacture and none are benefited 
by their issue except the few favored ones who are permitted 
to issue them as with a breath. These are able to collect in- 
terest upon most if not all of them while the general public is 
compelled to pay for their use. 



1 S - HmBSTTTirFHS, 

Stebstitutcs Unr^iable.. 

No storm, epidemic, or other disturbance can drive tire 

•<trolley or the bicycle out of existence ; they are as real or 

■.■more real and substantial than the korse they substitute. 

The credit instruments which are used for money are fictitious, 

•unsul)Stautial ated fugitive, in the hear of financial storm and 

business distuibauce. In the hour in which they are most 

needed they are least available. At the first breath of panic 

they fade tint© nothingness and leave our business stranded. 

.f^ot Enough of ©ollarg. 

If we consider all of our paper money of every kind and 
. :all our subsidiary coin as tru:* lEoney, there is not enough of 
it w^ith all the standard gold and silver coins to represent the 
-savings of our people. Comptroller Eckles recently stated 
that our people had on deposit in the various banks and sav- 
ing-; institutions 5,000.000,000 of dollars, while at the same 
time the tetal volume of money of all kinds in the country 
outside ©f the treasury was $i,40o,©o€,oo© (it is now $.1,600,- 
000,00®) Tfeis as a remarkable fact since it shows that the 
"title to every dollar is vested in at least three different persons. 
If we conclu-de that nothing but standard gold and silver 
coins are raomey and all ©ur paper money a debt, payable du 
money, 'then the title toeverj' dollar an this country is vested 
in at least five different persoKS.; or if as some assert, nothing 
■ but gold coin is money., then is every single dollar ow-ned in 
. fee simple by at least ten different people.* 

Enormous Use of Substitutes. 

l^gain, The lav/ reg^uires certain National banks to hold 
a reserve in their vaults of 25 per cent, of their deposits in 

■■•'There is something " rotten " in this sys<-e«i. and it must be corrected. The 
right of any one to lend a dollar and collect reNt or interest for it. is as clear as the 
right to lend a horse ©r a iiouse, aad is based first, upoia the assumption that his labor 
an<J sacrifice have been given it^ producing it or in its purchase from the pioducer ; 
and second, that while the borrower uses it and pays r-ent for it the owner .arises to 
use it. And there is no naorc warrant for allowing a man to sell or loan a " dollar " 
that does not e.tist than there is for allowing him to sell or rent a. house that does 
tiot exist; and it is clear from the above that in one way and another, at least three 
dollars have been sold or rented to our people for every dollar in existence. The 
method by which this " Aim flam " or " bunco " game is worked is " another story " 
upon which we may write in future. 



SUBSTITUTES': Jf^-t 

Tawful money. This is sirapl)^ prudence based upon expe- 
rience in the past, and if the other banks and savings institu- 
tions were equally prudent, $1,250,000,000 would be thus 
impounded, leaving" only $^150,000', 000, about $2.00 per capita 
with which to effect our exchanges. When we consider that 
vast sums in the aggregate are represented m call obligations 
among our people which do- not appear in our bank records, 
this becomes an astoundfng revelation of the scarcity of real 
money and' of the extent to which substitutes have beea in- 
jected into our financial system. 

Tlse Limit of 5ub8titatioii. 

If we conclude that many of the substitutes for money 
are more convenient and therefore more desirable than the 
money itself, we must bear in mind that there is a distinct 
limit to the extent to- which substitutes may be used. It is 
clear that they cannot be safely held as reserves in our redemp- 
tion funds which are kept to insure the prompt payment of 
current demands, since they are tliemselve-s evidences of debt, 
and if 25 per cent, of our call obligations in ultimate money ia 
necessary for this purpose, then is the limit obviously reached 
and long since passed in this countrj'. 

A Difference in Scibstitutes. 

The convenience of a substitute is not the only thing to 
be considered and we wish to point out what seems to us a 
most important distinction between different kinds of substi- 
tutes. The silver (or gold) certificates are substitutes which 
possess all the elements of convenience, yet each and every 
dollar of them represents directly a commodity dollar which 
has the cost of production behind it and which is out of use 
while the certificate circulates, so that it may be justly said 
that Labor has been employed to its full value in the produc- 
tion of this substitute. 

A bank note, however, while equally convenient and per- 
haps equally safe, has no cost of production behind it, for the 
commodity dollar which it is supposed to represent is still in 
circulation, having been loaned to the goverment at interest 
and paid out to the public for services Tendered. 



•20 SXTBSTTTTrTES. 

When a silver or gold certificate is issued there is a guar- 
antee that some one has actually made the sacrifice necessary 
to produce the commodity represented and is entitled to credit 
Irom the country, to the extent o^ that sacrifice, the actual 
commodity being surrendered. 

When a bank note is issued no such guarantee is given. 
On the contrar}^ we are simply assured that some one has 
loaned the government an equivalent sum of money, in order 
to possess which he must indeed be presumed to have made an 
equivalent sacrifice, but which he does not surrender to disuse, 
but keeps in circulation at interest, so that the bank note is a 
clear gratuity to the bank which issues it and employs no 
labor in its production. 

As between these two forms of substitutes, as long as 
there is a surplus of idle workmen in the country, and natural 
resources from which the money commodities may be pro- 
duced, it ought not to be diflScult for a workingman competing 
with idleness to choose. 

Nor is the distinction much less marked as between our 
other government issues of paper money and the National 
Bank notes. For while it is true that no labor is employed to 
produce a greenback, yet every one that is in circulation is a 
guarantee that some one has rendered an equivalent service to 
the government and that the benefit of that service (the per- 
petuation of the Union) was reaped by all the people, while 
the servi-ce rendered to start a bank note into circulation was 
Tendered to the bank and for its sole benefit. To choose 
between these two forms of substitutes for money is an im- 
pending duty upon every citizen, and it ought to be easily 
performed. 



CHAPTER V. 

The Value of Gold and Silver, 

Kocapitnlatlon— The Value of tiold— Tlie Value of Silver Prior lo 
1873— Parity under Free <'oanas:<'— Foreij^'u Exehanjie as Ali'octiii;;' 
Parity— Miflereiit ('oiiia;;-e liatio!^ as Aflectins- Parity— Tlieory of 
Binietalisin — Experience of Itiinetalisin — Importance of thin 
i'ountry in the Past— Importance of thi<« Country Xow— Xo IteaMOii 
for D<>monetizin;; Silver in 1873— Remand for and Supply of Gold 
—The Present Vitlue of Silver — The Elfect of rree ^olnnse of 
Silver. 

Recapitulation. 

We shall now conclude that as far as the limited scope of 
this discussion will permit the following points have been 
demonstrated : 

First. Value wherever found is the result of the con- 
tending forces of supplj' and demand, and varies with the vari- 
ation of these forces. 

Second. That as a standard or measure of weight nuist 
have weight and be subject to the natural forces which pro- 
duce and govern weight, so also a standard or measure of value 
must have value and be subject to the varying forces of supply 
and demand which create and govern value. 

Third. That the American DoHat is the standard of 
value in this country, and not the material of which the dollar 
is made. 

Fourth. That the demand for dollars is due entirely to 
the fact that they are made by law the debt-paying instrument 
iji- this country and is not dependent upon the material oi 
whick they may be made. 

Fifth. ■ Thait the use of substitutes as far as they per- 
form the functions of dollars relieves the demand and tends to 
reduce their value. 

Sixth. That the value of a dollar is fixed by the num- 
ber of dollars in existence as compared to the demand for 
them, and not by the value of one or all of the materials of 
which they may be made. 



22 THK VALUE OF GOLD AND SILVER. 

The Value of Gold. 

We now propose to show that the vaHie of gold is fixed 
by the valae of the money into which it may be freely coined, 
and that the contrary notio»that the value of money is fixed 
by the value of the gold of v;hich it is made is as false as it i& 
popular. 

The ralue of gold is fixed by the contention of supply 
and det?iand. The total production of gold m the world for 
the la&t 400 years was $8,781,858^700', and the total stock of 
gold money in the world in 1895 was $4,145,700,000. 

The total production of gold in the world since r873 is- 
given as $2,728,226,200, and during the same period the mints 
of the world coined into money $3,635 790,522, or $900,000,- 
000 more than was mined. Some of this was of course old' 
coin recoined. The proportion of foreign recoinage is not 
given, but the United States corned $1,044, 130', 051, or nearly 
one-third of the entire amount in the same period, of which 
$45,354,422 was recoined ; so that if we allow the foreign re- 
coinage to have been four times as great Jn proportion, it seems 
safe to say that the entire production w-"S coined into money. 
Assuming then ascertain that at least /la.y of the supply goe& 
into money we see that the principal demand for gold is for 
the manufacture of money, and if this demand should cease 
entirely, or even considerably, the other demands could not 
sustain tke value. 

Nothirg is more certain than that the flow of any raw- 
material of which there is a limited supply will be into the 
most profiitable chan-nel, and its use in this channel will fix its- 
value and compel all other users either to substitute it with 
something cheaper or raise the value of their product, if the 
demand for it is imperative. 

The manufacture of money in civilized countries is now 
restricted to the single commodity, gold, and as the value of 
money has risen the va-lue of the raw material has risen, be- 
cause the supply has not been SAifficient to meet the demand 
for money and such othier imperative demands in; the arts- a& 
have per&iste(5. 



■THE yA%Xm • OF ' G OTU'D . ATiD SILVER . 23 

'^he Value of Silver Prior to I873. 

"Prior to 1S73 tlie same was true of -silver, for the same 
j'j:;cner'il relations of supply and . money use'e-xisted with Tefer- 
ence to silver. Th« total production of silver in t^he world to 
date is .... .. ^10,344,561,140 

Coinage to date^ - - - $4,235,900,000 

'-Since 1873, the world's proSucti'Oii has 'been $2,967,200,200 
" ■" *' coinage " " $2,878,033,234- 

Parity under Free Golnage. 

Under tlie laws which permitted the free coiuage of botk 
^old and silver at a fixed ratio in tlie principal money using 
countries, the demand for money being in excess of tfec supply 
of either metal and coKStituting the principal demand fur both, 
■maintained them at a substantial parity because a short supply 
-of one and a tendency to rise in value would ^transfer tfoe entire 
.money demand from it to tlie other and prevent a separation. 

Foreign Exchange as Affecting Parity., 

Money., like everything eke, flows from one ceuEJtry to 
-nn 'ther in obedience to varying demand. Even gold itself is 
.alternating above and below par as indicated by the rate of 
exchange. If the demand for money is greater in Germany 
than m France, French coins of given weight as well as bul- 
lion, would flow to Germany to be coined into German coins 
of equal weight, and vice versa. 

If the demand for American dollars exceeded the demand 
for coins of equal weight in any foreign country, the coins and 
bullion of that country would flow to omr mints for coinage, 
'dui not etkerwise. 

Different Coinage Raties as Affecting Parity. 

When the free coinage of silver and gold was first estab- 
lished in this country the ratio was fixed at 15 of silver to i of 
gold by weight, while the ratio in Europe was 151^ to i, and 
in the ebb and flow of coin and the corresponding coarse of 
bullion we got all the silver and the Europeans all the gold, 
for the obvious reason that when money was flowing to Europe 



24 THE VALUE OF GOLD AND SILVER^ 

an American gold coin conld be converted into more European 
money than could a silver coin of equal value, and therefore 
gold went out instead of silver ; and wlien money was flowing 
to us, a foreign silver piece could be converted into more of 
our money than could a gold piece of equal vaJue, and there- 
fore silver cayne in instead of gold. 

This was our experience from 1792 to 1834, but in 1834 
the weight of our gold coin was altered and the ratio changed 
from 15 to I to 16 to I, and the foreign ratio remaining at 15}^ 
to I the position was reversed and silver went out and gold 
came into this country. 

From 1834. to 1873, 8,031,238 standard silver dollars and 
$77,734,964.50 of full weight and full legal tender fractional 
pieces were coined in our mints, nearly all ot which was 
shipped abroad and recoined into European money. In 1853, 
the weight of our fractional coins was reduced and $59,047,406 
of them were coined, most of which remained in this countiy 
because it did not pay to export them. 

About $[,000,000,000 of gold was coined in our mints 
during this period (62,000,000 in a single year), and silver was 
coined in correspondingly large quantities in foreign countries. 
The foreign coinage for each of these years is not given by 
our official reports, but the world's production of silver for the 
period was $2,000,000,000, more than half of which was coined 
in the French mint. (See table III). 

It is clear that with two different ratios established in 
countries where the demand for money was practically equal 
there would be room for a divergence of the values of the two 
metals to the extent of this difference plus the cost of trans- 
portation to and from the mints. For, since an American sil- 
ver dollar could be coined into 3 per cent, more of European 
money than could a gold dollar, the value of gold must rise 
more than 3 per cent, before the American demand would leave 
it for silver, or silver must fall more than 3 per cent, before 
the American demand would fall upon it ; but if the change 
should exceed 3 per cent, sufficiently to paj^ transportation 
and show a profit, the entire demand both European and 
American would leave the one and fall upon the other and jire- 
vent a further divergence. 



THE VAtUS OF GOtT) AND SILVER. 2^ 

Theory of Bimetalism. 

This is the theory of Bimetalism and the practical test of 
all time down to 1873, and especially this experience of the 
two ratios from i'<34 to 1873, confirms its correctness. 

With the mints open to the free coinage of both metals, 
at a fixed ratio, and the option with the debtor to pay in 
either, there can be no serious divergence unless the entire 
money demand can be fully met by one of the metals, or the de- 
mand in the arts is sufficient to absorb one of them ejitirely from 
the money use. 

A glance at the figures will show that there is no reason- 
able probability that the latter will ever occur on account of 
the enormous quantity of eacli already coined. The total out- 
put in iSy6 is given a-^ of gold $202,956,000, and of silver 
$213, 463, 70c, of which $59,251,640 gold and $38,580,184 sil- 
ver, or about 24 per cent, was used in the arts, and tlie stock 
of coin is over $4,000,00-), 000 of each, or enough to supply 
ihe world's present consumption in the arts for forty years if 
none were mined. 

That the world can ever be fully supplied with money 
from either of the metals alone is even more unlikely, for after 
having ab^•orbed all the gold that could possibly be diverted 
from the arts, and an equal quantity of silver, together with 
fabulous sums of paper money, the value of money in civilized 
countries has steadily risen for the last twenty-five 3'ears, not- 
withstanding the fact that substitutes for money in the shape 
of our modern credit instruments are used in 90 per cent, of 
our current exchanges, thus lessening the natural demand for 
money. 

Experience of Bimetalism. 

Under the conditions existing prior to 1873, when the 
principal mints of the world were open to the free coinage of 
both metals, the recorded experience of the world was as 
follows : 

VEKK.)!). ■ GOLD. SILVER. 

l792toiS).o. World's nnmia! product, ^ 10.000,000 526,000,000 

1S40 to 1S73. " " " 111,861.000 48,000,000 



25 THIS VALUE OF GOLD AND SILVER. 

varying from 2.6 times as much silver as gold to 2.3 times :*s 
much gold as silver, and yet the parity was maintained within 
the limits pointed out. 

Importance of this Country in the Past. 

The importance of the United States as contributing to 
that result is significant, and we wish to emphasize; it here, 
for during the period from 184'© to 1873, xvhen the production 
-of gold was enormously in excess of any recorded precedent 
and frequently four times as great as that of silver, the United 
States had '^'overvalued gold^" or bad established a higher 
mint rate for it than that of Europe, aud the burden of xijain- 
taining its value fell first upon this country, for while the 
annual output increased from $33,393,000 to $132,513,000, or 
nearly fourfold in four years, and Germany, Austria and Bel- 
gium, at the behest of the money lenders, completely, and 
Holland and Portugal, partially demonetized it, the United 
States absorbed the entire output of the mines, in California 
and elsewhere in this country from 1847 to ■1865, and imported 
some millioas from abroad, thus maintaining its value within 
tdie li'mits of the difieTenoe in -coinage r-atio plus the cost of 
traTtsportation. Only a few times during the entire period did 
the value of silver rise to a point thai would check its flow to 
the European mints, and then o^ly for brief periods. The 
United States coined $62,6i4.,49-2 of gold in r85i., $56,846,187 
in 1852, and $83,395,530 in 1861, while in 1895, (forty years 
later), we coined but $59,616,357, and in 1896 but $47,053,060. 

importance of this Country Now. 

'This was an exhibition of the demand for money in the 
^United States as compared to that of the world, and if any 
' have doubts as to the ability of this cottEtry to remonetize 
silver and maintain its parity at 16 to i with gold, let him. 
■remember this experience in which our country was but an 
infant (23,000,000) among «the aations, and the disproportion 
■ in the production of the two metals infinitely greater than it 
r is now, and greater than it is ever likely to be again, and per- 
haps his appreciation of the present importance of this country 
in. determining the financial policies of the world will expand 



THE VALUE OF GOLD AND SILVER. 



27 



to a realization of the fact that with 75,000,0. o of people 
whose appreication of the value of money is second to none on 
earth, and with our relative numerical and financial import- 
ance many times as great as in the former struj^gle, we can dic- 
tate the gold price of our silver product to the world, as we 
then dictated the silver price of our gold product. 

The United States was then one of the greatest and is 
now the greatest money using country in the world, and when 
in 1873 we Ceased the coinage of standard silver money and 
the coinage of "Trade Dollars" was substituted, the pace 
was set for the world and in a few years all the civilized nations 
had followed suit. 

No Reason for Demonetizing Silver in 1873. 

No intelligent reason has ever been given for this change, 
but lest any suppose that a serious change in the relative sup- 
ply of silver or gold hnd occurred to induce it, we append the 
following table showing he world's production by years : 

GOLD. SILVER, 



('•"lining 
Value. 



Commercial 
Value. 



1872 — 

1873 — 
1874- 

1875- 



$55,663,000 
81,864,000 
81,864,000 
81,800,000 
71,000,000 
80,000,000 
87,600,000 
81,040,700 
94,882,200 
96,172,600 



,173,000 
83,958,000 
83,706,000 
82,120,800 
70,674,000 
77,578,000 
78,322,600 
75,278,600 
84,540,000 
83.532,700 



1870— $129,614,000 

1871— 115,577,00. 

115.577.000 

96,200,000 

90 750,000 

97,500,000 

1876 103,700,000 

1877- 113,947,000 

1878 119,092,000 

1879 108,778,800 

No change either in quantity or value is here disclosed 
that could warrant such legislation, but it was done and the 
entire demand of the civilized world for money fell upon and 
was restricted to gold. The production of gold had fallen 
from $123,000,000 in 1863 to $96,ooo,oo<3 in 1873, while the per 
capita demand for money had increased with the march of civil- 
ization and the inevitable result was a rise in the value of 
money. An enormous increase in the use of substitutes and 
an abnormal inflation of credits has served to check this rise 



28 THE VALUE OF GOLD "AXfj BiLVnK. 

and modify its consequences, but the limit of the safe use of 
crediis and substitutes has been reached and long since passed 
and v-till the value of money has risen lo > per cent. 

Demand fer and Supply of Gold, 

The demand for gold in the moneys channel lias been in 
•excess of the supply and since gold may be converted into 
money without cost its value has risen with the value of money. 

The production of gold in the twenty > ears from 1853 to 
1873 was $2,559,253,0':o., or $4.10,495,600 ni&Kc than was pro 
daced in the twenty years following from 1873 ^o 1893 (J>2,- 
168,757,400), showing ikdecfeased supply meeting an increased 
demand, so that an increased value was inevitable. In short, 
its value has become so great that it can be, and is now being 
mined in the most inhospitable and inaccessible regions of the 
world and in nearby districts, from ores so poor that notwith- 
standing the enormous im^provements in methods they could 
not be worked with profit zX its normal value. Under the 
stimulus of this abnormal demand the production rose in 
1891-2 to the highest figure reached in the fifties, and is now 
far in excess of it and still the value is rising. 

The Present Value of Silver 

like that of gold is fixed by the value o{ the money iuto which 
"it may be freely coined. The production of silver since 1873 
>lias been normal and has increased in about the same propor- 
tion as that of gold. The demand for it has ccnsisttd of that 
used in the arts, and for the //w//f</ coinage of civilized na- 
tions, and the unlimited coinage of Mexico, China and until 
■ very recently India and vjapan. 

The demand for money in these countries whose mints 
are still open to coinage on private account, v/hich is compar- 
atively small on account of their semi-civilized and unpro- 
ductive condition, \< frilly met by the silver supply, and there 
has been n© rise in its value. 

As we descend in the scale of civilization the demand for 
■money as well as for all other modern conveniences decreases 
until in savage districts it ceases altogether, and a string of 
beads or a glittering toy will buy more of their crude products 



THE VALUE OF GOLD AND SILYEK . 2g 

tlian will a bag of money. China with her three hundred and 
•sixty millions of inhabitants has but ^2.08 per capita of money 
and has all she wants. Vast districts in the Empire have 
-none at all yjnd make their few exchanges by direct barter. 
The penetration of English civilization into India is effecting 
a change in that country and a growing demand for money is 
apparent. They now have $3.33 per capita, and since the 
Indian mints were closed to silver the value of their money 
;has risen considerably. The Central American States have 
^3.66 and Mexico has $8.41, while in the heart of Africa they 
have none and want none. 

India and China with 656,00 :),oco of people have $f ,700,- 
•000,000, v/hile the United States with but 72,000,000 has au 
«qual sum., and our money is twice as valuable as is theirs. 
If the movement which is now on foot to place this vast popu- 
lation with the rest of the world on a gold basis, should suc- 
ceed and compel them to use only gold for money, tlie de-truc- 
tion of their present stock and their growing demand far future 
supply will raise the value of money beyond anything we have 
imagined possible. 

The value of money, however, in these countries has not 
irisen because the demand is fully met by the supply of silver, 
and the value of silver has not risen becau-e the supply has 
■been equal to all the demands upon it. 

Silver at par with other Commodities. 

The value of silver has not fallen materially because the 
cost of production has been a check upon producers ; ver)' 
many of the miners have been coiupelled to cease operations 
and only those most favorably located and best equipped can 
continue. Much of the silver that is now produced is a by- 
product of copper or gold mines. The demand for copper has 
'been greatly stimulated by the applications of electricity, and 
many of the copper ores carry a heavy percentage of silver. 
If i/iis supply contiF.ues and the demand for silver decreases 
greatly as by the substitution of gold or paper in the money 
use, silver may fall much lower than it now is, but as long as 
it must be mined directly the cost of production will prevent 
its fall much farther than it now is. 



^O THE VA.LtJE OF GOLD AND SILVER. 

The fact as shown by Table I that silver ballion has inairf- 
tained its place with other commodities and has lost none of 
its purchasing power, is proof conclusive to any fair mind that 
no injustice would flow from its remonetization. 

The Effect of Free Coinage of Silver. 

If the United States mints are opened to silver at i6 to i, 
the value of 37 ij^ grains of silver will rise to the value of an 
American dollar and stay there as long as the mints are open. 

The value of any and every American dollar of full legal 
tender quality will be equal and stay equal to every other 
American dollar. 

The value of silver will be and remain at par with g^ld 
until the demayid for Americayi money is fully met by the supply 
of silver. 

If the demand for European money is in excess of the de- 
mand for American money, gold will flow to Europe since gold 
is the cheapest commodity that can be converted into European 
money. 

If the demand for American money is met by silver and 
the demand for European money cannot be met by the present 
stock of American coin ($750,000,0^0), plus the annu d output 
of the mines of the world ($240,000,000) estimate for 1897, 
the value of European money will rise above the value of 
American money and gold will go to a premium as measured 
in our money. 

In any event the increased supply of European money 
coming from all the gold instead of a part of it, and the in- 
creased supply of American money coming from all the silver 
instead of a part of the go'd, will decrease the value of both, 
and a rising scale of prices will ensue all over the civilized 
world. 

In those countries which now are fully supplied with 
money from silver the total loss of supply through its diver- 
sion to the American mints and the probable diminution of 
their present stock by its conversion into American monej' will 
experience a rapid if not an instantaneous rise in the value of 
iheir money and a corresponding fall in their prices 

The final tendency of which joint influences will be to 
restore the par of exchange and partially at least the scale of 
prices as they existed throughout the world prior to 1873, 



CHAPTER VI. 

The Test Question. 

The Arltliinetle of Facts— Production of Sliver— Pre««nt Product »11 
Consumed— Increased Production— Probable Supply of Silver— 
The Demand for Money— The Ininiedlat<'^ Oemand for Silver— The 
Current Demand for Money — l>cmand Unlimited — Oar Debts 
Abroad— Our Present Needs- What of the Future? — Hon. A. J. 
Salfonr on Standards — Trusts and Contblnes born of Falling 
Prices— The Present In-qulry, 

The test question in the minds of those who think it 
Tiecessary that gold should not go to a premium, is as to 
whether the United States can furnish a demand for money 
that will absorb the world's surplus product of silver and still 
■maintain the value of our money at par with the jjold money 
■of Europe. 

The Arithmetic of Facts 

•assures us t'hat we can and we now review it as a conclusion 
to this part of our argument. 

Production of Silver. 

The anRual product of silver in the world has remained 
iibout the same for the last four years. For the last two years 
it has been as fellows : 

1895. 1896. 

World's product, . $216,292,500 $2:3,463,700 

United States, . . . 72,051,000 76,069,000 

Mexico, .... 60,719,000 59 017,600 

Bolivia, .... 28,444,400 ^9.393,900 

Chile, .... 6,505,900 6,505,900 

Peru, 4,089,500 2,914,300 

Columbia, . , . 2,182,400 2,182,400 

Central American States, . 2,000,000 2,000,000 

North and South America, . 175,992,200 168,' 83,175 

From this we learn that four-fifths of the entire product 
>comesfrom this hemisphere, three-fifths from the United States 
and Mexico, and one-third of it from the United States alone. 



3^ 



TUB TEST gaESTiojr. 



The total production in the United States for the last fouf 
years, 1=93-94-95 and '96 was 1289,696,000 

Of this sum we coined $ 46,791,202 

Exported . . . 138.924,761 

Consumed in arts . . 103,980,037 $289,696,000 

The world's production in the same period was $854,000,000 

Of this the world 

Coined, $526,000,000 

Recoined, 70,000,000 



Net coinage, 

*Used in the Arts, 
United States, $103,000,000 



$456,000,000 



India, 

Russia, ♦ 

France, 

England, 

Italy, 

Other Nations, 



140,000,000 
40,000,000 
25,000,000 
20,000,000 
12,000,000 
20,000,000 $360,000,000 



$Si6,ooo,ooo 



To be accounied for $38,000,000 

Statistics as to China are not at hand, but judging by the 
exports of England to China it is probable that sluf imported 
as much as $50,000,000 more than she coined in the period, 
and if so, it shows that the entire product has been consumed- 

Present Product all Consumed. 

The latest report of the director of the mint does not 
show that any considerable stock of silver bullion has accumu- 
lated anywhere in the world, and we therefore conclude that 
the experience of the last four years, in which the production 
of silver has been greater, and its opportunity for free conver 
sion into money less, than in any similar period of the world's 
history, has demonstrated that the demand for it is persistent 
and to a degree imperative. 

*No reliable statistics are obtainable as to the amount of silver consumed in the 
arts in foreign countries and our own are not coinplete, but the net i ^ipnrts are given 
and tlie coinage for each year, and the amoiint above given is the difference between 
ttie net inrtpons and the coinage. 



THE TEST QUESTION, 33 

Increased Production. 

Under an increased value it is certain that some of these 
demands would be decreased, just how much no one carf tell, 
but we will assume as a basis for our calculation that under a 
value double that of the present only one-half of this demand 
would persist, and that the remainder ($100,000,000) of the 
present production would come to the United States mint. 

Under an increased value it is certain that the production 
would be stimulated, but to what extent no one can say ; but 
the greatest recorded increase in the production of gold under 
a similar stimulus was 50 per cent, in five years. We think 
it altogether probable that this ratio would be equaled by sil- 
ver, and so we assume that the production would rise to $300,- 
000,000 per year, and that $200,000,000 of it would come to 
our mints. 

ProbabJe Supply of Silver, 

We consider this the largest quantit}'- that could ever 
come in a single year, for as the volume of money was in- 
creased its value would be decreased and ultimately, to the 
present bullion value of silver (cost of production), at which 
time its production would have shrunk to its present propor- 
tions. 

The coined silver of Europe could not flow to us, for it is 
now worth 3 percent, more in gold than it would be then, nor 
could the manufactured silver come to the mint for it is also' 
more valuable than our coin , so that with as much certainty 
as we can predict anything with regard to either gold or sil- 
ver, we can say that the supply cannot he expected to exceed 
$200,000,000 per year, and may not reach half that sura. This 
would be eight times as much as was coined under the Bland 
Act. The quantity of Mexican or Indian money that can be 
spared from their present circulation would be comparatively 
small, but large or small it rou/d come but once, and then only 
in exchange for our products. 

With this estimate of the possible suppl)^ of silver we 
now consider 



314 THE TEST QUESTIO^f. 

The Demand for Money 

which is to absorb the silver product, and it may be sumrae(5 
"up as follows : 

iBy the last statement of the Treasury department (July 
31, 1897), we have outstanding $346,000,000 of greenbacks 
and $230,000,000 of National Bank notes. The greenbacks 
are objected to by our gold standard friends ostensibly because 
they are redeemable in gold and cannot be maintained at par 
without forcing the governiaent to borrow gold with which to 
redeem them on demand. 

We think, however, that the real reasons why the smaU 
percentage of the gold men who really understand the ques- 
tion want them retired are, First, that they are a legal tender 
for all debts between individuals and cannot be discriminated! 
against by gold payment clauses in private contracts ,' second, 
that they are fwf redeemable in gold, but in cotn at the option 
of the government ; and third, that their retirement with 
bonds will furnish a permanent investment for the banks and 
make room for more bank notes which will be under the con- 
trol of the banks. 

We with other bimetalists object to the bank notes as 
being a special privilege to a favored class, and therefore lei 
us retire both of these objectionable forms of substitutes and 
create an immediate and imperative demand for silver which 
will restore its parity whh. gold. 

W>e can thus make room for $576,000,000 of silver without 
affecting the present vo'urae of our currency or dts purchasing 
power in the least- This demand can be made immediate and 
imperative to the extent of the cash in the treasury ($250,000.,- 
000) and the volume of bank notes ($230,000,000), and this 
being three times as great as the possible immediate supply 
the value of silver will immediately rise to a par with gold at 
i6 to I. 

Again, we have been told that under free coinage of silver 
our gold would immediately leave us. This is, of course, a 
mere conjecture without a single fact or argument to sustain 
it, but if it does leave us altogether or in part the volume of 
our money would be decreased and its value increased in pro- 
portion, so that gold would /a// beUnv ^ar. (This is amon|^ 



THE f tST QUESTION'. 3-5 

tile most foolisli of the fool statements of the gold standardT 
advocates). If we admit however that our gold will leave ns 
and flow to Europe, which is possible in the course of ex- 
change, it would make room for $700,000,000 of silver with- 
out increasing our stock of money at all or decreasing its 
value in the least. On the contrary, if our $700,000,000, to- 
gether with the annual output, ($240,000,000) of gold should 
flow to Europe it would inevitably increase the supply and 
decrease the value of European money, and our money would 
go to a premium unless our stock was proportionately in- 
creased. It is therefore probable that more than $1,000,000.- 
000 of silver would be required to replace the gold and keep 
our money from rising above that of Europe. 

Again. The Comptroller of the Currency reports thai 
our people have on deposit in our banks and savings institu- 
tions $5,000,000,000, and the law requires certain of the Na- 
tional banks to hold 25 per cent, of their deposits in reserve. 
If all the banks were required to do the same, and common 
prudence would seem to irtdicate that they should be, $1,250,- 
000,000 would be thus inipounded as against $850,000,000 
which is now so held, makirlg room for $400,000,000 without 
increasing the circulation and simply furnishing a safe basis 
for our present bank deposits. 

The Immediate Demand for Silver. 

From the foregoing it is clear that $2,0 0,000,000 of sil- 
ver can be absorbed without afi"ecting the value of our money 
as measured in gold, but it is also clear that the predicted flow 
of $700,000,000 of gold to Europe and its replacement with 
that amount of silver in this country would add that much to 
the world's stock and tend t'» a general increase of prices. 

The parity of the metals once restored it is likely that 
European countries would reopen their mints to silver, but 
presuming that they do not do so, and that the burden of 
maintaining the parity of silver will rest entirely up m the 
United States, we now consider 

The Current Demand for Money 

in this country as compared to that of Europe, for it is to be 
remembered that while we must absorb all the silver, Eui ope 



36 THE TEST QUESTIOISr. 

must absorb all the ^old, and as the production of tlie twe 
metals is now about equal the difScuhy is not so great as it 
would seem, and not nearly as g neat as tfeat of maintaining 
tflie parity of gold in the fifties, when there was n'ere than 
twice as tauch gold as silver produced and our comparative 
importance far less than now. 

Demand Unlimited. 

What is the demand for money in the United States ? It 
comes from seventy millions of the most industrious, enter-* 
rprising, wealth-producing and comfort-consuming people on 
the earth, e^ual in number and double in consuming power to 
-England, Ireland, Scotland, Wales, Spain, Belgium, Holland, 
^Portugal and Switzerland combined. This vast army of work- 
ers inhabit a territory that stretches from the Atlantic to the 
-Pacific Ocean, and includes three million square miles of the 
most productive land in the world. 

In point of development the vast resources of this country 
are practically untouched, although of the 1,400,000,000 tons 
of freight per 100 miles, we carry 800,000,000, or 57 percent., 
and notwithstanding the loss we have sustained through the 
gold standard, our tetal wealth is $64,00 ,ooo,ooe, or 36 per 
cent, greater than that of Great Britain. Our manufactures 
in 188S were $7,200,000,000, or 75 per cent, greater than those 
of the United Kingdom. 

Gur agricultural products e.re $3,800,000,000 more thaE 
double those of Great Britain, and $500,000,000 more than 
those of Russia (including Poland), but time would fail us t© 
write further in this line. Suffice it to say that -this is the 
mightiest nation that the v.'crld has ever seen, full of inherent 
power and untold possibilities, and yet slie seems to be gradu- 
ally losing headway. Like a mightj^ steamer in mid-ocean, 
with every ether equipment to perfection and a scant supply 
of oil, with smoking boxes and abraded bearings, the machinery 
.groans and labors as if in .the throes ef death. She gradually 
loses way and finally steps for want of oil. So this great na- 
tion in the forefront of the race of civilization, freighted with 
lhe{]dear«st hopes of the common people ^f the world., backed 



THE TEST QUESTION. 37 

'by Tesources "beyond computation and invited forward by in- 
comparable opportunities, is hampered and restrained by lack 
of money. Witk brains and labor to spare, with enterprise 
and intelligence and uRtold resources to develop, we are idle 
for lack of naoney. 

With an area capable of sustaining the population of the 
•globe, a form of governrReiit that should command the love 
and patri<;^ic service of every man, and a -traditiotial reputa- 
tion as the land v/here the oppressed of every -clime u)ighi find 
a refuge, we find otarselves so hanapered and depressed that ix 
is seriotisly .proposed lore-strict iinani grata on .and 
" Shut the gates of mercy on mankind ". 

For years we have borrowed money from abroad for every 
rising Keed in our development until our indebtedness is appal- 
ling, ard when we propose to coin the product of our owm 
.'iabor into the cons-atutional money of the land, we are met 
with the as'-ertion that we will " over produce " it and impair 
our credit so that we can borrow ko more. 

It is strange that men do not see that when we shall sup- 
ply our own demand by employing out own labor in manufac- 
turing our own money, we shall not need to borrow, but can 
"begin 10 pay what we already owe abroad, But let us see. 

We need money — First, to lubricate the naachinery of 
'trade, and to leosen the abraded bearings of our industi%5/. We 
are said to have a circulation, when it is not hoarded in banks 
and stockiEigs, of $r,6o©,ooo,©OG at the highest estimate, and 
yet 9© per cent, of our business as done with bank and other 
credits, le percent, of "oil" and 9© per cent, of '"'wind", 
■with which to lubricate our machinery. What money we have 
lias been borrowed from England three times over, and we owe 
'iier now $5,000,000,000, Every tinjie we get stuck for " oil " 
we borrow from England until we are now in a position where 
(with normal crop conditions abroad) we cannot pay our inter- 
.est without borrowing money to do it with. 

<5ur Debt Abroado 

The steady and persistent growth of our debt abroad is 
■ene of the most serious facts with which we have to deal. We 
Slave not space to go into detail to show how our debt abroad 



38 



THE I'ESr QUESTION. 



began and reached its present magnitude. Sufficient to say 
that in i860 it was insignificant, and we were carrying 65.2 
per cent, of our foreign commerce in American bottoms. In 
1869 American shipping had fallen to 27.5 per cent., and had 
netted an annual loss of $25,000,00-5 in freights to us. This 
and other items together with the balance of trade against us 
had created a debt of $1,500,000,000 in 1889. The fall in 
prices since 1873 has served to decrease the debt paying powar 
of our balances of merchandise, and the debt has steadily 
grown until it now amounts to $5,000,000,000. To see how, 
take the year 1894, which though Mr Cleveland and the Wil- 
son bill were in full force, showed a larger balance in our favor 
of merchandise than any year since 1881. 

DR. CR. 

5200,000,000 



1894. United States. 

To interest on debt. 

To excess of freights on Eng- 
lish ships, 

To excess of bills drawn by 
American travelers abroad. 

By net exports, merchandise, 
By net exports, gold. 
By net exports, silver, 

Total. 

Net balance against us, 



1895. United States. 

To interest on debt. 

To excess for foreign freight, 

To excess of bills by travelers 

in Europe, 
By net exports merchandi>e. 
By net export gold, 
By net export silver, 

Total, 

Balance against us. 



31,400,000 
75,000,000 



$306,400,000 



DR. 

$200,000,000 
39,760,000 

75,000,000 



$237,145,950 

4,528,942 

37,164,715 

$278,837,005 
27,600,395 

$306,400,000 
CR. 



75,568,200 
31,948,449 
27,037,901 



114,760,000 $434,590,550 
180.169,450 



$314,760,000 

Thus we see that in two years we have gone in debt to 

Europe to the extent of $207,769,845, or over $rco,obo,ooo p'er 



THE TEST QUESTION'. 39 

year, to "balance which interest-bearing obligations of one kind 
•or another have been sold in Europe. We need therefore 
5 £00,000,000 per year with which to pay our interest charges 
to Europe before any can be had for the development of our 
own resources. If we add to this an equal sum per year to 
apply on the principal we can see a demand that will absorb 
;all the silver we can hope to get during the next century. 

Our Present Needs, 

Again. If the last generation found a legitimate use for 
<the $5,000,000,000 of foreign money which it borrowed, and 
the marvellous growth <>f the wealth-producing enterprisesJ 
which it was used to capitalize and develop is proof that they 
■did, what shall we .sa}'- of the present and future needs of our 
people? Will they be less? Impossible:! Will they be 
greater ? Undoubtedly, and many fold. There i>*. no dis-ent 
from this conclusion, for tven tiie most radical goldjtes adtjiit 
it in their strenuous coatention for "^strengthened credit." 
Hon Thomas B. Reed, in all his public utterances during the 
last campaign^ insisted that we shoiild " maintain otir credit " 
so as to " invite foreign capital to come to us for iijvestment," 
and we submit it to the candid judgment of patriotic Ameri^ 
■cans if these facts do not prove that otjr demand for money is 
in excess of the possible supply from silver. And also ask 
them to consider whether it would not have been better /or us 
in the past to J^ave employed our army of idle and hopeless 
working people 'm p reducing- this money from our silver mines, 
than to have followed the advice of Mr. Reed and borrowed 
tt from abroad ? 

This ^' home industry " would have employed every idle 
man in the United States at remunerative wages, without ad 
ding one iota t© the stock of manufactured goods competing 
in the markets of our country or the world. The money we 
borrowed would have remained in EtjrQpe to maintain the 
price of commodities there, the debts of the world would have 
ibeen reduced, the "tramp" and the '-anarchist" would 
iiave been unknown in this fair land, and the star of hope 
would have shed its blessed lustre in the homes and hearts of 
$he poor. 

The past is gose. 



40 THE TEST OUES'TIO]??. 

But What of the Future ? 

That our money must increase in quantity, as we increase 
our store of property, or a fall in price, or debt-paying power 
ensue, is as certain as that God reigns or that $ Hanna Secured 
a $eat in the Senate. 

Money is one of the modern agencies in the production of 
property or commodity wealth. If one desires to build a house 
or manufacture any other product he must, in the advanced 
stage of our civilization where the division of labor is so 
great, take mcntey, which is imperishable and of fixed debt- 
paying power, and exchange it for a commodity which is not 
only perishable, but certain to vary in debt-paying power with 
the rise and fall of the value of money.. If, therefore, the 
supply of money is not increased so as to prevent its rise in 
value, no man can safety undertake to produce or improve 
property. Speculative enterprises, which depend upon spo- 
radic development from local causes, alone can thrive under 
such conditions. 

Hon. A. J. Balfour on Standards, 

The Right Honorable A. .J. Balfour, of Manchester, Eng- 
land, said in a speech on October 27, 1892 : 

"Of all conceivable S) stems of currency, that system is 
ass\iredly the wor.-t, which gives you a standard steadily ap- 
preciating, and which by that very fact throws a burden upon 
every man of enterprise, upon every man who desires to pro- 
mote the agricultural or industrial resources of the country, 
and benefits no human being whatever, but the owner of fixed 
debts in gold/' 

No truer words were ever spoken, and in the new ceatury 
that is about to dawn the world will s^o forward in the produc- 
tion and improvement of property, just in proportion to the 
speed with which we increase our stock of money. The im- 
proved meihods of production, communication and transpor- 
tation, which are but the concrete rt-sults of increased skill 
and intelligence, have multiplied our productive capacity manj' 
fold, and unless the production of money is proportionally 
multiplied some of our people must of necessit}- remain idle 



TIIK TEST QUESTION. 4! 

all tlie time, or all of us a part of the time, or else a continued 
loss of the debt-p?:ying- p:)\ver of property and a constant .o-am 
in the power and burden of debts result. 

Trusts and Combines born of Falling Prices. 

The limitation of the production of money to gold in the 
last twenty-five years has resulted in a short supply followed 
by its rise in value, and a corresponding loss in the price or 
debt-paying power of property, to resist which " trusts " and 
combinations of capital invested in productive enterprises have 
been formed, and employers, pinched by the increasing bur- 
dens of fallinjj prices have reduced or endeavored to reduce 
wages, to resist which Labor Unions and Federations of 
Workmen have been formed, strikes, lockouts, riots and blood- 
shed have ensued from the clash of contending efforts, all 
aiming at the last analysis to ma/nfavi prices by restricting 
produciioji, tJirous;h voluntary or enforced idleness. 

The God-given and constitutionally guaranteed rights of 
men to buy and sell in the most advantageous markets have 
been denied by law to merchants and producers and the in- 
dustrious and ambitious laborer, with the brawn and muscle 
of youth as the only means of providing for his helpless and 
decrepit age, is restrained from using it by the threats of his 
fellows and compelled to see it peri'^h, with his hopes as ihe 
hours pass by, and all in well-meant but fruitless endeavors to 
maintain prices while adjusting ourselves to the shori supply 
of money from the single gold source. 

The Present Inquiry. 

Shall the selfish outcry of the owners of '' fixed debts in 
gold " deter us from applj-ing the reujedy to the root of the 
evil ? Shall the slavish fear of " depreci.iting " their money 
induce us to continue the suicidal policy of destroying the 
debt-paying power of all other property, together with the 
hopes and aspirations of our people ? We answer No ! a thous- 
and times NO ! and as long as the God of heaven gives us 
breath we will, protest against the present system. 



CHAPTER VII. 

The Effect of Falling Prices. 

■.tJovernmeiift vs. Private Rosr«lati<»«»— Senator Hoar and Shylock— 
The Owners of fixed debts In Cioltl— The Ag'ents of these gold Own- 
ers— Officials who are hired— European Cereal Oonsnntcrs— Europe 
V*. United States— Our ]Loss their Oaiu— Eoss to Farmers— Wheat 
and Silver — Prices liave not fallen in Silver-using: Countries — 
Mexican vs. American — Disadvantage of Americans — England's 
use of American silver in India— Who wants Bimetalism ?— Stand- 
ard of Prosperity. 

Government vs. Private Regulation. 

As long as the " Dollar" is maintained as the standard 
•unit of value, the government which created it and is author- 
ized by the Constitution to "regulate the value thereof" is 
in a position to protect itself and its citizens from extortion. 
To correct a rising tendency, free coinage may be extended or 
paper money issued, while a fall in the value of money beyond 
an equitable average may be checked by withdrawing paper 
substitutes or restricting the coinage of commodity money. 

For the unequivocal assertion and strict maintenance of 
this financial policy we strenuously contend, for if it be con- 
ceded that the commodity gold is the standard and that all 
moaey shall refer to gold for valuation, then will the regula- 
tion of the value of money pass into the hands of those who 
own the gold, and by a concerted withholding of gold from 
circulation they can enhance its value, and with it the value 
of all our money, and correspondingly decrease the value of all 
other property. Having thus wrecked unfortunate debtors 
and absorbed their property at ruinous prices they can loosen 
the strings, send out their gold, reduce its value, boom the 
price of property and sell at the advanced valuation. 

Having unloaded their holdings they can begin again the 
hoarding process, withdraw their gold, reduce prices and shear 
the world ad libitum ad infinihim. 

Senator Hoar and Shylock. 

In a discussion of this que'^tion in the U. S. Senate, on 
January 25th, 1898, Senator Hoar, of Massachusetts, compared 



THE EFFFCT OF PALLING PRICES. ^3 

those who were contending for the rights of the debtor under- 
existing law, to Shylock, dt-iuanding his " pound of flesh " 
because it was " nominated in the bond." 

Mr. Teller, of Colorado, who was speaking (on the Teller 
resolution which was an affirmation of the rii.,'hts of the gor- 
ernment) declined to belittle the discussion by following Mr. 
Ploar into such a comparison, but we shall insist that if the 
figure is used at all the celebrated " Fourth Act " shall be set 
with the characteis rightly placed. 

The United vStates government in the role of " Portia ", 
the righteous judge, who is to determine the issue as berween 
" Antonio ", the hapless debtor, who represents the producing 
classes whose blistered hands and* quivering flesh must pay 
the bond with all its increment and interest, and " Shylock ", 
the money lender, who, with merciless purpose, demands not 
justice, but the consummation of a scheme which in its execu- 
tion will destroy the merchant's life. We shall not attribute 
the malice of Shylock to the modern creditor, but rather thank 
God that the metaphor fails in this as in some other particu- 
lars ; but we shall insist that the consummation of the gold 
standard scheme as it is now boldly advocated by its promoters- 
would not only be a travesty upoa justice, but would invoke 
increased intensity in the struggle to maintain prices which 
has already resulted in the loss of life, and which must, event- 
ually, result in conflicts beside which the Pittsburg and 
Chicago riots, to sa)' nothing of the deadly work of Martin's 
deputies at Wilkesbarre, would pale into insignificance. 

We expect, nay, we demand that " Portia " shall re nd-. r 
the judgment of "a Daniel," giving to the creditor the ut- 
most farthing of his bond, not only in the letter but in the 
spirit of the law. But since in the case before us there is no 
forfeiture, we shall expect a decision that will say to the mis 
taken advocates of gold monometalism, " No, gentlemen, j^z^ 
s/ia// not bind the proiectmg hand of government, nor endanger 
the peace of the nation by the consummation of your sense- 
less scheme. You shall have your ' pound of flesh,' but ' not 
one drop of christian blood ' shall flow to gratify the avarice 
of one, or condone the ignorance of another of thoic who would 
pursue this suit." 



^^ THE EFFECT OF FALI.TNG PKICES. 

The merchant then, as we are now, was willing to pay 
"three times the value of the bond," and it had been well 
for Shylock to have taken the ducats, and it vv'ill be wiser for 
those who hold our bonds to-day to be content with the dollar 
named in the contract than to invite a discussion of tlie meth- 
ods by which a bond, purchased with paper money worth only 
half as much as gold, when gold was worth only half as much 
as now, has come to be payable in money worth four times as 
much as the original cost in prodacts. 

When we shall b ing " a 3'ouiig and learned doctor to our 
courts," it may go hard with Shylock.. 

The Owners of Fixed Debts in Gold. 

When we consider that the Rothchilds alone own one- 
'third and that less than fifty men own two- thirds of the free 
gold in the w^orld, it is easy to see how this fleecing of the 
world may be done, and to locate the prime movers in the gold 
standard agitation. The farther thought that the world' s pro 
duction of gold above tha' de7nanded in the arts is 7iot 7norc thapi 
sufficient to pay the annual interest upon the debts owned by these 
people, should reveal the gravity of the situation to every 
patriot. 

The Agents of these gold Owners 

in every civilized country and a horde of hangers on, who 
thrive by assisting these men to despoil and en-^lave the race., 
are also interested in the success of their pL^ns, and also 
certain 

Officials who are hired 

to serve their purposes in legislating and interpreting the law 
in their interest. 

After these the debt-owning and money-lending classes 

generally »ee in the appreciation of money an added power 

over their fellows, and unless restrained by humanitarian or 

■patriotic motives ally themselves to the gold standard forces. 



THE EFFECT OF FALLING PRICES. 45 

European Cereal Consumers 

a'Ho find in the appreciation of gold a decided advantage. 
The fall in the price of commodities is a loss to them on their 
exports, bnt since they import more than they export the net 
result is a general gain. 

Europe vs. United States. 

The balance of trade in merchandise is uniformly in favor 
of this country ; that is, we have since 1-8S0 exported an an- 
nual average of $100,000,000 worth of merchandise more than 
we have imported, and it is clear that if the general range of 
prices Vvcre twice as high as at present (about v;h it they should 
be as to farm prv)dact>} the money value of this balance would 
be $200,000,000 instead of ^.100,000,000. If we add to this 
the annual net export of silver which during the last four 
years has bten worth over $30,000,000, and at normal value 
would have been worth $60,000,000, we see that the sum of 
^260,000,000 would have stood to oar credit yearly., almost if 
not quite enough to pay our interest charges and leave a com- 
forts b'e balance. 

Our Loss their Gain. 

The loss to the country at large on its export trade by 
virtue of appreciated money has bten enormous, but since the 
farmers furnish about 75 per cent, of all our exports the loss 
falls most heavily upon them. 

There are some notable exceptions to the general slump 
in prices, some things seem to have had peculiar power to re- 
•sist the downward trend. 

Wages are said to have maintained their average rate, 
and while we are loth to dispute official reports, we find it 
hard to believe this statement. It is contrary to our observa- 
tion and is certainly not true of the men and women workers 
that we personally knov/ ; but if for the sake of argument we 
admit it, we have already observed that the debt-paying power 
of the laborer has not increased with his increased skill ; and 
his hoarded savings, if in money, are only half what they 
would have been had his wages increased in money as they 



46 



THE EFTFCT OF FALLING PRiCtS. 



have in products, and if invested in a home or other property, 
are only worth half the money he has paid for them. 

Organized labor, no <'oubt, has also been potent to resist 
the reductions in wages. 

Loss to Farmers. 

The farmers contribuied to the exports of merchandise, 
as follows : 

Pork, hams, lard, etc., in 1873, . . $54,000,000 

Pork, hams, lard, etc., in 1895, .* , . 90,000,000 

At 1S73 prices this would have amounted to 87,000,000 



Net gain in one year, .... 

Cotton export in 1873, , . . . 

Cotton export in 1895, 

This would have been worth at 1873 prices, 

Net loss in one year, .... 

Flour exported in 1S73, 
Flour exported in 1893, 
This would have been worth at 1873 prices, 

Net loss in one year, .... 

Wheat export in 1873, .... 

Wheat export in 1895, 

This would have been worth at 1873 prices, 

Net loss in one year, .... 

Exports 10 principal products, 1873, 
Exports 10 principal products, 1895, 
This would have been worth at 1873 prices, 



$3,000,000 
$202,000,000 

205, CK 0,000 
591,000 000 

$386,000,000 

$ 17,000,000 

52,000, 00 

103,0 '0,000 

$51,000,000 

$46,000,000 
44,000,000 
89,000,000 

$45,000,000 

$372,000,000 
453,000,000 

932,000,000 
$479,000,000 



Net loss in one year, .... 

The experience in 1896 was not materially different, and 
with the exception of wheat 1897 was even worse. 

Wheat and Silver. 

Much emphasis has been laid upon the fact that silver- 
using countries are in competition with us as exporters of 



THE EFFECT OF FALLING PRICES. 47 

wheat and the peculiar advantage given them by the rise in 
the value of gold over silver. And we here restate our argu- 
ment with the facts upon which it was based for the purpose 
of showing that the recent rise in the value of wheat is a proof 
of its carrectness, rather than a refutation of it, as some affect 
to believe. 

Prices have not Fallen in Silver-using Countries. 

The debt-paj'ing power of their property and products is 
the same or a trifle greater than in 1873. In this and other 
gold-using countries they have fallen to one-half their former 
range. (See Table I) Let us note the effect of this diver- 
gence by a familiar illustration. 

Mexican vs. American. 

Two men in 1875 bought farms exacfy alike in every par- 
ticular, one on the north and the other on the south bank of 
the Rio Grande river. Each invested $10,000, one in Mexican 
and the other in United States coin, which at that time were 
of equal value. Each borrowed 1^5.000 with which to stock 
and operate his farm, giving 6 per cent, mortgages as security. 
Now let us suppose every condition of climate and soil as well 
as of ability and industry to have been exactly the same with 
these two men, and what has been the result of their respect- 
ive endeavors ? The Mexican has found that when he invested 
his money in seed and machinery to put in a crop one year, 
the same amount of crop next year would return him the 
money invested, and that his interest charges ($900) and taxes 
could be paid with the same amount of crop each year. The 
American has found that with every succeeding year a larger 
amount of crop has been required to pay his interest, taxes and 
other fixed charges, until in 1896 twice as much is required 
from him as from his Mexican neighbor. If the crop is wheat, 
the Mexican receives $1.00 per bushel and can pay his interest 
charge with 900 bushels, while the American gets but 50 cents 
and must part with 1800 bushels to pay his interest. (As we 
write wheat is $1.06 in Chicago and it is $2.25 in Mexico). 



4^ THE EFFECT OF FALLING PRICES. 

The Disadvantage of the American 

is seen at once in competition with the Mexican. Our conten- 
tion is that the Mexican or other silver-using producer of 
wheat gets as much for his product as formerly, and since his 
cost of production is not increased in any way he can afford to 
sell his wheat at the old price and make a fair profit. 

Mexico does not produce wheat for export, but India, 
which is a silver using country does, and can afford to :^ell it 
at $i.oo per bushel (in their silver coin) 

The United States and Mexico rsre the silver-producing 
countries of the world, and as long as Europe can buy enough 
of silver from us for 50 cents. (gold) to mike $1.0 of Indian 
coin, with which she can buy a bushel of wheat, .>^he will never 
give us more than 50 cents (gold) fir a busht-l of wheat. 

As long as we raise a surplus of wheat the foreign buyer 
will fix our price , but when there is no wheat /or sale in silver 
coimtries he cannot use silver to depress our pi ices but must 
supply his imperative demand in the open market and the price 
of silver is not a controlling factor. This has been the con- 
dition for the last 3'ear. 

The failure of the wheat crop in India has served to show 
us only more clearly what the effect of cheap silver is on our 
wheat prices. 

England's use of American silver in India. 

A glance at Table No. II is instructive, for it shows the 
movement of silver to have been as follows : 

IMPORTS AND EXPORTS OF SILVER PER YEAR, SINCE 1880. 



Net exports from 
United States 
and Mexic9. 



Grois imports 
into England. 



Gross exports 
from England. 



Net imports 
into India. 



$49,000,000 I $47,000,000 I $46,000,000 I $41,000,000 

In view of this remarkable exhibit (of heads I win and 
tails you lose) the reason for English adherence to the gold 
standard is apparent, but these figures show but a tithe of the 
evil, for they only exhibit the means used 1o beat dov/n the 
gold price and debt-paying power of all our products. 



THE EFFECT OF FALLING PRICES. 49 

Who wants Bimetalism ? 

The contention for the restoraiion of silver to free coinage 
comes not so much from the producers of silver, although 
they are to be immediately benefited by it, but from the pro- 
ducers of all forms of commodity wealth who have come to 
realize that money, the debt-paying instrument, is a necessary 
factor in the present methods of producing property. In the 
present condition of diversified and divided labor no one person 
can build a modern house or construct a fabric, and he who 
would produce either must use money to hire workmen and 
purchase his materials, so that the completed structure neces- 
sarily becomes his debtor in a certain sum of money. Under 
the operation of the gold standard the property gradually but 
surely loses its money value, and becomes insolvent, or unable 
to pay its debt to the producer. This leads to a general loss 
of confidence in the solvency of property and sensible men 
must refrain from producing it. The supply of money from 
silver and gold will be greater than from gold alone, and will 
tend to decrease its value and restore the debt-paying power 
of property. 

This will certainly stimulate the production of property, 
and the only way in which our money can possibly become 
too cheap will be in that we fail to produce property with suf- 
ficient speed, and in view of modern appliances and the hordes 
of idle workers in this country, those of us who grasp this 
thought have no fear of such a result Property has become 
cheap because we have produced it faster in proportion than 
we have produced money. Thousands have been compelled 
to cease producing it altogether, while to every newly discov- 
ered source of gold supply thousands of would-be money pro- 
ducers rush pell mell, braving even death itself, in the struggle 
to be first. 

Every man to whom a comprehension of the significance 
of this situation has come, wants the free coinage of silver, 
because y<?r every dollar of silver produced many dollars' worth 
0/ property may be produced, and all may work who will. 

When all are employed who wish to work, wages may 
rise, and the degree of general prosperity we have a right to 
expect may dawn upon us. 



;50 THE EFFECT OF FALLI1«G PRICES. 

Standard of Prosperity. 

When we speak of Prosperity we mean something diflfer- 
^t from the so-called prosperity of the present, for no finan- 
cial policy, however vicious, can entirely extinguish the 
enterprise of Americans, and we shall have more or less activity 
always, but as a standard of value is necessary in estimating 
value, so a Standard of Prosperity is necessary in estimating 
Prosperity. 

General Booth, in appealing to the English aristocracy for 
the poor of London, set up as his standard for them ' ' the 
average comfort of a London cab horse ' ' ; and while this no 
doubt would be a great improvement upon the condition of 
many in gold standard England, it does not suit us. 

Nor does the prosperity recorded in our census of 1890 
measure up to what we demand in free America, although as 
we look back to it from our present misery, it seems bright in 
comparison. 

The census of 1890 shows as to agriculture : 

"No. of farms in the United States, . . 4,564,641 

" acres in farms, .... 623,218,619 

" "in average farm, ... 137 

Total value of farms and stock, . $15,982,267,68900 

Total value of farm products, sold, con- 
sumed, and on hand,. . . $3,460,107,454 00 
Value of products of each farm, . . $538 94 
No. of persons depending on each farm, 5.74 
Total yearly income each person, . . . $93.89 
" daily *' " " . . . 0.25.8 
If the expenses for seed, taxes, insurance, interest, feed 
of stock, repairs, depreciation, etc., be subtracted, the net 
daily income per individual will be less than twenty cents. 

It costs 28.5 cents per day to keep a pauper in the alms- 
houses of the country, so that this standard does not suit us. 
The standard we set up is one in which any man who 
wishes work may have it, and at such wages as to enable him 
by industry and economy to marry the woman of his choice 
and found an American home ; to raise a family of American 
children, keep them out of the mills long enough to educate 



THE EFFECT OF FALLING PRICES. 51 

them in the American public schools, teach them an honest 
occupation, and at the same time save enough money to keep 
him and his wife in comfort during their declining years. 

That misery, vice and crime are flowing from the impedi- 
ments to industry and honorable marriage among the young, 
is clear to every observer. In competition with parents and 
grand parents for work, compelled to face a hopeless poverty, 
and restrain the strongest instincts of their nature, it is not 
surprising that many go wrong, and it would be well if relig- 
ious teachers would study this question with a view of discern- 
ing one of the causes of increasing crime and decreasing 
religious interest. 

We are not inspired to sacrificial effort in an endeavor to 
conserve the value of one kind of property as against the ab- 
sorbing encroachments of another kind, but wht-n the subtle 
schemes of selfish men are thus disclosed, and the certain out- 
come of their success will be to check the forward movement 
of the race, obscure the inspiring light of hope, extinguish 
the sacred fires of patriotism and circumscribe the liberties of 
free born men, then swells the patriotic heart with courage. 

Around the sacred shrine of liberty we draw the magic 
circle of the brotherhood of man , and forbid the usurping tyrant 
to set his foot within. Aye ! and should he dare to invade its 
hallowed precinct^, upon his head, though it should wear the 
ermine, or a presidential crown, we'll hurl the potent wrath of 
freemen, not only with the pointed shafts of speech invective, 
but if need be, with the mailed hand of sovereign power I 



CHAPTER VIII. 

Objections Answered. 

50>Ceiit Dollars— Building Ansociations, «^tc.— Parity as Measured in 
Property— Maintaining; Parity of Silver with €»old Money— Dis- 
crimination (Liegal)— The L.aw— Discrimination in Defence of Law 
—A False Pretense— The Pledge of Government— Why not Change 
the Ratio?- There has been more Silver Coined since 1873 than 
B«- fore— We want " Honest Money "—We want '" Sound Money "—A 
X'lood of Silver. 

Among the objections offered to the free coinage of silver, 
the statement that it will debase our currency is perhaps the 
most frequent, and while many of the crude and contradictory 
statements of this objection are absurd and even amusing, the 
fear that is honestly entertained by many and which finds ex- 
ipression in this 

*'50-cent Dollar" 

objection is entitled to consideration. To those who believe 
that the higher priced dollar^ or one that will buy the largest 
amount of property is the best, for us all, and the only 
^' honest" dollar, we have offered an argument in the preced- 
ing considerations to show that their contention is not true. 
If we have not convinced them we despair of doing so except 
by an experimental test, and join the issue squarely on this 
;point. We aps certain that a dollar which appreciates is not 
honest for anybody, and is profitable only to a comparatively 
small class of citizens. 

Building Associations, etc. 

To their great concern lest the savings institutions, build- 
ing associations, employers, etc., shall pay in 50-cent dollars 
(as measured in property) we oppose our concern for the ex- 
perience of thousands of our citizens who are in the position 
of a certain hard working mechanic who joined a building 
association about twelve years ago, bought a house and bor- 
rowed $800 from the association on it. The association has 
recently run out, and during the time this man paid in, in 



OBJECTIONS ANSWERED. 5^ 

actual cash. $1176; interest on his payments would have 
brought them up to or near $1500 ; he has improved the place 
to a con>iderable extent and to-day it will not sell for $600. 

While our " hest dollar " loving fiiends are prophesying 
this 50-cent dollar plague, we ask them 10 rise and console the 
men who are actually receiving 40-cent property right here in 
Chester and all over the land for the loocent dollars they 
have earned by their labor and paid into these institutions. 

Parity as Measured in Property. 

We believe that under the stimulus of prospective profit 
and restored confidence in the solvency of property, it-; pro- 
duction would increase with sufficient rapidity to prevent its 
rapid or serious rise in price due to the increased money sup- 
ply from silver, and it would be many ye^rs before a just parity 
between money and property would be restored, if at all, so 
that the fear of a " 50 cent dollar ", as measured in property, 
is unfounded. 

Our prediction of prosperity is based not upon cheap dol- 
lars, but upon the fact that all may work who will, and when 
all are employed the wage earner can demand, and will be 
cheerfully accorded by prosperous employers, a fair share of 
the product of his toil. 

Maintaining; Parity of Silver with QoJd Money, 

There are those who apprehend the need of an adequate 
supply of money and would favor free coinage of silver, but 
they fear that the United States alone cannot maintain the 
parity of gold and silver coins at 16 to i, or, in other words, 
that gold will go to a premium and our silver dollars will be- 
come " 50-cent dollars ", or at least be less than loo-cent 
dollars as measured in gold. To these we have already sub- 
mitted facts and arguments to show that their fears are ground- 
less, but we now call attention to the fact that it has been 
twice declared to be the policy of this government to maintain 
the parity between gold and silver, once as to the metals and 
once as to the coins. 



54 CyBjECTlONS ANSWEREf?. 

Discrimination (LegalJ^ 

The legislation of 1873 discriminating against silver de-^ 
stroyed the parity between the two metals, and the legislation 
of 1878 failed to restore it b;catlse it did not remove the dis- 
crimination. The only possible way in which the government 
can keep this pledge, as to the two metals, is to restore free 
coinage to silver. 

The legislation of 1878 restored the silver dollar to its 
original position on an equality with gold dollars with the sin- 
gle exception that it might be stipulated against in a private 
contract, and notwithstanding the fact that thousands of con- 
tracts have been Written in which silver is stipulated against, 
the demand for money has been so great that this discrimina- 
tion has not destroyed the parity. Under free coinage this 
discrimination could, and doubtless would destroy the parity. 
We therefore pfopose to remove this disability and make our 
silver dollar a full legal tender. 

But not only has the silver dollar overcome this /f^a/ dis- 
abilitvy but it has been able to survive a most infamous attempt 
on the part of the executive oflBcers of the government to 
destroy the parity by illegally discriminating against it. 

The Law. 

The Act oi March i8th^ 1869, the first law ever signed by 
President Grant, declared 

"That the faith of the United States is solemnly pledged to the payment In 
coin or Us equivalent, of all the obligations of the United States not bearing 
interest, known as United states motes, and of all the Interest^bearing obllg»< 
lious of the United States except in cases where the law auiborising the issue 
of any such obligation has expressly provided that the aame may be paid In 
lawful money or other currency than gold and sllVef." 

The refunding Act of July 14th, 1870, provided for the 
issue of bonds, payable principal and interest in coin of the 
then standard value, and every bond extant to-day, even the 
last Cleveland issue, carries the inscription that they are 
payable 

" in coin of the standard valiie of the tfnlted States on July I4th, 1870 " 

The Matthews Resolution, passed in 1878, declared 

"That all the bonds of the United Stat*s * • • are payab'e, principal 
and interest, at the option of the government, la silver, dollars of the coinage 



OBJECTIONS ANSWERED. 55 

of the United States containing 412}/j grains of standard siver, and that to re- 
store to its coinafee such silver coins as a legal tender in payment of such bonda, 
principal and interest, is not In violation of the public faith nor in derogation 
jof tlie rights of the public creditor." 

Secretary of the Treasury Sherman, in 1878, in bis report 
stated tliat he would redeem United States notes in gold or 
silver, but expressly 

"reserving the legal option of ttoe government" 

to pay in either. 

The Act of July 14, E890, (Sherman Act) declared that 
the Secretary maj' redeem 

"in gold or sliver coin at his discretion, it being the established policy of the 
United States to maintain the two metals upon a parity with each oth«r upoia 
the present ratio or upon such ratio as may be established by law." 

Discrimination in Defiance of Law^ 

And yet, in spite of all these clearly stated laws Secretary 
of the Treasury Foster, under President Harrison, on October 
14th, 1 89 1, surrendered the option of the government to pay 
in silver and began the senseless policy of paying gold vvhea 
gold was demanded, thus transferring the option from the 
debtor to the creditor and making it possible to throw the 
entire demand for money from the less to the more desirable 
coin, which under normal conditions of money supply would 
be certain to destroy the parity. 

The Cleveland administration pursued the same policy 
■even when it required an increase of $263,000,000 in the pub- 
lic debt to do so, and the present administration follows this 
precedent to its only legitimate conclusion and declares that 
these silver dollars are not dollars at all, but are i^imply prom- 
ises to pay dollars, and Secretary Gage is now trying to induce 
Congress to make pr-ovision for redeeming them in gold. 

We charg*' that in the presence of the solemn pledge of 
the government to maintain the parity, this persistent effort 
to destroy the parity is little less than treasonable, and thank 
God that the United States Senate as tiow constituted will 
prevent its consummation. 

A False Pretense. 

We perfectly understand that the pretense of those who 
are actively pushing this plan is ihat gold redemption is neces- 
sary in order to keep the faith of the government and maintain 



56 OBJECTIONS ANSWERED. 

the parity ; and to fix this idea in the public mind they have 
not hesitated to falsely assert that the past and present parity 
of our silver dollars was due to the fact that they were ulti- 
mately redeemable in gold. 

We charge that this is false, and that certain men in high 
positions in the government who have the confidence of many 
citizens, are talking and acting as if it were true while know- 
ing it to be false, and are purposely trying to deceive the 
people. 

If 500,000,000 of silver dollars, the material in which is 
worth but half that sum, have maintained their parity with 
gold in spite of the persistent effort to discredit them, and 
without the support of gold or other redemption, then is every 
visible or invisible support of the gold fallftcy removed, and 
the contention of those established who assert that any dollar 
of full legal tender quality will remain at par with any other 
dollar of the same quality. Nor can it be shown that any 
number of dollars having the cost of producing 412}^ grains 
of silver behind them can ever reduce the value of a dollar 
below an equitable relation to other property. 

The Pledge of Government 

to maintain parity can only be kept by the government stand- 
ing ready to receive either silver or gold as its debtors of 
every class may choose to pay it, and to compel its creditors 
and all other creditors who live under its flag to do the saoie. 
No other nation on earth attempts to maintain the parity of 
its money in any other way, and if this way fail, it cannot be 
done at all except by the surrender of all that was valuable in 
the purchase of our revolutionary struggle. 

The Declaration of Independence, 

to sustain which the choicest blood on earth was shed, and 

The Constitution 

of the United States, the Magna Charta of human liberty, 
have each for their foundation stone the purpose to 

'• Establish Justice," 

and if any policy whatever shall thwart this purpose it mus« 
be abandoned. 



OBJECTIONS ANSWERED. 57 

The ultimate question then is not whether we will main- 
tain parity, but whether we will surrender governmental pre- 
rogatives and our people to the mercy of Shylocks. 

Why not Change the Ratio ? 

Many think the ratio should be raised to a point nearer 
the present commercial ratio and there are several reasons why 
it should not. 

ist. The stock of gold and silver in the world to-day is 
about equal at 16 to i, and the present rate of production is- 
at a ratio of less than 14 to r. If these facts indicate any- 
thing they show that the present ratio should be lowered 
instead of raised. 

2d The French ratio is 15^'^ to i and if au agreem'-nt 
should be made between France and this country it would be 
best to establish the French ratio for both, since our present 
coinage could be then recoined at 153^ to i without los-;, while 
the French coinage could not be changed to 16 to i without 
loss. 

3d. Assuming (what we do not admit) that free coinage 
will not restore parity at 16 to i, we hold that no human being 
can predict how much if anj^ it will fall short of it, and that 
thererore no other ratio can be intelligently selected until the 
true conditions of supply and demand are established under 
free coinage at its old ratio, and until this is done the question 
of a change cannot be entertained. 

4th. If the value of money should ultimately fall to the 
present bullion value of silver only justice would be done, and 
nothing but good would follow, for the purchasing power of 
4i2}4 grains of silver is practicall}^ the same to-day as it was 
in 1873, and the cost of production is a guarantee against a 
further decline. 

There has been more Silver Coined since !873 than Before. 

The point sought to be made by those who urge this ol)- 
jection is, that the coinage of silver since 1S73 having been 
enormously greater than before, and the price continuing to 
fall is proof that the cause of its fall in price is not to be 



58 OBJECTIONS ANSWERED. 

charged to demonetization. In support of this, the fact is cited 
that in eighty-one years, from 1792 to 1873, only 8,000,000 
silver dollars were coined, and in twenty years, from 1873 to 
1893, nearly $500,000,000 were coined under the Bland Act. 

This statement is true, but as they well know who make 
it, it refers only to the United States mint, and ignores the 
fact that while the United States mint was coining 8,000,000 
silver dollars it also coined 136,000,000 of small coins, and the 
French mint coined 1,053,000,000 in the same period, to say 
nothing of other European countries , so that any fair state- 
ment of the facts will show that in each period the demand 
was about equal to the supply, and the value remained stable. 
^\\^ price of silver fell as did the price of everything else, foi 
the reason that the supply of gold plus $500,000,000 of silver 
was not sufficient to meet the demand for money and the value 
of money rose destroying W\^ price or debt-pajdng power of all 
property. 

We want " Honest Money ". 

Yes, and so say we all. Our contention is for an honest 
dollar, but we shall insist that a dollar which has increased 
and is increasing in purchasing power is not an honest dollar, 
but on the contrar}^ is of all thieves the most detestable, for 
it not only deprives his victim of his wealth but paralyzes his 
efforts to earn more. We want a dollar that will be subject 
to as free competition in its production as are the other forms 
of material wealth it is used to measure, and which will thus 
be kept at par with them by the automatic operation of the 
laws of trade and render an honest account to posterity of the 
obligations we incur for them to pay. 

We want ♦♦Sound Money". 

Yes, and so do we. Our differences are not so much as to 
what we want, as to what we have and are to have. We deny 
that our currency'' is or can be "sound" when it is shown 
that every dollar of it has been sold and resold until a vast 
volume of credits and substitutes have become an absolute 
necessity in our business. A vast balloon swayed and dis- 
torted by every passing breeze, and in constant danger of col- 
lapse. So much so that the dignity and honor of this country 



OBJECTIONS ANSWERED . 59 

cannot be asserted as against even an effete power like Spain 
without danger of precipitating a panic. As we write (March 
14th, 1898) the Phila. Ledger affirms that the uncertainty as 
to a war with Spain growing out of the "Maine" disaster 
has destroyed the vahie of stocks to the extent of many mil- 
lions, as follows : 

"Siuce the 15th of February sixteen of the most active stocks have declined 
85^@26^. Sugar has fallen 17)4 percent,, Burlington 155-s. Consolidated Gas 
18;vg, St. Paul 10, Rock Island 11, Louisville U, Manhattan 22, Metropolitan 26^, 
New York Central 10%, and Northwest 14%." 

and that while nearly every one of the properties represented 
are earning more than they have been for years on account, as 
Mr. Depew says, of the recent movement of wheat to Europe. 
We want "sound money" " commodity money ", with 
the cost of production back of it, and in sufficient quantities 
to place our business on at least a semblance of a cash basis, 
nor will we be deterred from our purpose to secure it by the 
selfish or senseless cry of those who wish to thrive by issuing 
a lot of " wild cat " bank paper substitutes, instead of allowing 
our working people to produce the honest, stable and reliable 
money we need. 

We propose to open the production of real money to a 

WIDER and more ADEQUATE FIELD OF COMPETITION, AND ENABLE 
THE PRODUCING MASSES TO COIN THEIR POWERS OF BRAIN AND 
MUSCLE INTO THE DEBT-PAYING INSTRUMENT OF THE NATION, IN- 
STEAD OF ALLOWING IT TO PERISH IN IDLENESS, AND DISCHARGE 
THEIR OBLIGATIONS TO THE DEBT-OWNING CLASSES, AT LEAST TO 
THE FULL EXTENT OF THEIR POWER AND WILLINGNESS TO PRODUCE, 
AND THUS TO FREE THEMSELVES AND POSTERITY FROM A PERPETUAL 
SLAVERY TO A MONFIYED ARISTOCRACY, BUILT UPON A SERIES OF 
DEBTS THAT ARE EVER INCREASING. IN SHORT, TO ENTER UPON A 
DEBT-PAYING INSTEAD OF A DEBT-CREATING ERA. 



The End. 



APPENDIX. 



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APPENDIX. 



II 



Table II.— MOVEMENT of SILVER COIN and BULLION. 



Net Exports 

from the 
United i^tatcs 



Net Exports I Gross Imports' Gross Exports i Net Imports 
from into from into India. 

Mexico. I Great Brittiin ! Great Britain. 



1879 


1 5.738.,775 


21,835,872 


52,494.269 


53,561,156 


19,323,407 


1880 


1,227,980 


22,388,576 


33,087,441 


34,360,804 


38,298,391 


1881 


6,297,477 


19,567,144 


33,585,673 


34,084,878 


18,943,610 


1882 


8,743,263 


17,337,024 


44,980.695 


43,630,382 


26,177,337 


18S3 


9,464,203 


30,103,064 


46,076,032 


45,369,630 


36,402,52S 


1884 


11,456,481 


34,008,568 


46,881,403 


48,598,733 


31,170,935 


1885 


17,203,006 


34,314,384 


45,908,639 


47,946,155 


35,215,819 


1886 


11,660,912 


30,384,496 


36,360,731 


35,154,131 


56,483,655 


1887 


9,036,313 


34,097,976 


37,853,295 


37,994,732 


34,823,511 


1888 


7,632,278 


31,502,096 


30,240,139 


37,060,480 


44,911,970 


1889 


12,034,403 


39,405,560 


44,700,749 


51,907,607 


44,998,963 


1890 


8,545,455 


41,847,008 


50,541,810 


52,866,658 


53,229,174 


1891 


1 * 2,745,365 


20,912,328 


63,663.246 


64,993,889 


67,147,619 


1892 


g,035,828 


49,250,763 


60,222.938 


68,495,988 


42,738,068 


1893 


I 7,653,813 


51,769,745 


72,912,463 


68,219,827 


60,934,726 


1894 


31,041,359 


47,320,215 


65,431,903 


60,979,318 


65,177,677 


1895 


27,631,789 


56,781,075 


60,428,333 


52,209,705 


30,381,745 


1896 


33,262,258 


44,919,693 


76,043,209 


74,182,191 


31,17»,988 


1897 


32,636,835 








27,740,012 



''■Iruporte<l. 



Table III.— GOLD and SILVER COINED in FRANCE CON- 
VERTED at £1 per 25 francs. 



Period of tive vears. 



Gold average 
per annum. 



"^ilver 

average per 

annum. 



1806-1810 

1811-1815 

1S16-1820 

1821-1825 

1826-1830 

1831-1835 

1836-1840 

1841-1845 

1846-1850 

1851-1855 

1856-1860 

1861-1865 

1866-1870 

1871-187i 

1803-1875 

Reduced to United States money 



£1,201,136 

3,299,503 

1,951,604 

465,748 

293,976 

826,149 

589,857 

159,326 

1,294,337 

12,669,263 

21,605,465 

7,667,357 

9,546,561 

2,475,213 

Total Gold 
£322,993,410 



£1,884,737 

5,208,029 

993,111 

3,526,432 

5,032,004 

6,575,120 

3,048,189 

3,033,286 

4,311,276 

1,431,755 

666,651 

175,088 

3,402,020 

2,742,776 

Total Silver 
£217,640,234 



?1,563,288,104 



11,053,378,732 



Ill 



APPENDIX. 



Table IV—PJiODUCflON, COINAGE and RELATIVE VALUE 
of GOLD and SIL VER in the world since 1792. 



Year. 


GOLD. 1 

1 1 


SILVER. 

1 






1 
Product. 1 


1 
Coinage. 1 


Product. 




Coinage. | Comni'l 




1 


1 






1 
1 


Ratio. 


1792-1800 


106,407,00011 1 


328,860,0001 


1 


15.41 


1801-1810 


118,152,000 


1 


371,677.000] 




15.60 


1811-1820 


76,063,000 


1 


224,780,000] 


1 


15.28 


1821-1830 


94,479,000 


1 


191.444,000 




15.79 


1831-1840 


134,841.000 


1 


247,930,000 




15.75 


1841-1850 


363,928,000 


1 


324,400,0001 


1 


15.75 


1851-1855 


662,566,000 


1 


1S4.169,000| 


1 


15.40 


1856-1860| 


670,415,000 


1 


188,092,000] 




15.30 


^861 1 


122,989,000 


|- 


45,772,000] 




15.50 


1862 1 


122,989,000 


1 


45,772,000 




15.35 


1863 1 


122,989,000 


1 


45,772,000 




15.37 


1864 


122,989,000 


1 


45,772,000 




15.37 


.865 1 


122,989,000 




45,772,000 




15.44 


1866 


129,614,000 




55,663.000 




15.43 


1867 1 


129,614,000 




55,663,000 




15.57 


1868 


129,614,000 


1 1 


55,663,000] 




15.59 


1869 


129,614.000 


1 1 


55.663,000] 




15.60 


1870 


129,614,000 




55,663,000] 




15.57 


1871 


115,577,000 




81.864,000] 




15.57 


1872 


115,577,000 


1 1 


81.864,000] 




15.63 


1873 


96,200,00(1 


1 257,630,802 


81,800,000] 


131,544,464 


15.92 


1874 


90,750,00( 


1 135.778.387 


71,500,000] 


102,931,232 


16.17 


1875 


97,500,00C 


1 195,987,428 


80,500,000] 


119,915.467 


16.59 


1876 


103,700,00C 


1 213,119,278 


87,600,000] 


126,577,164 


17.88 


1877 


113,947,20( 


)| 201,616,466 


81,040,700] 


114,359.332 


17.22 


1878 


119,092,80( 


) 188,386.611 


94,882,200] 


161.191.913 


17.94 


1879 


108,778,80( 


) 90.752.811 


96,172,600] 


104,888,313 


18.40 


1880 


106,436,80( 


)| 149.725,081] 


96,705,000] 


84,611,974 


18.05 


1881 


103,023, 10( 


)\ 147,015,2751 


102,168,400] 


108,010,086 


18.16 


1882 


1 101,996,60( 


) 99,697,170] 


111,802,300] 


110,785,934 


18.19 


1883 


1 95,392,00( 


) 104,845,114] 


115,297,000] 


109,306,705 


18.64 


1884 


101,729.60( 


)| 99,432,795] 


105,461,400] 


95,832,084 


18.57 


1885 


1 108,435,60 


)\ 95,757,582) 


118,445,200] 


126,764,574 


19,41 


1886 


1 106,163,90 


a] 94,642.070] 


120,626,800] 


124,854,101 


20.78 


1887 


i 105,774,90 


[)] 124.992,465] 


124,281,000] 


163,411.397 


21.13 


1888 


1 110,196.90 


0] 134,828,855] 


140.706,400] 


134,922,344 


21.99 


1889 


1 123.489,20 


168,901,519 


155,427,700] 


139,362,595 


22.10 


1890 


I 118,848,70 


149,244,965] 


163,032,000 


152,293,144 


19.76 


1891 


130,650,00 


0] 119,534,122] 


177,325,300 


138.294,367 


20.92 


1892 


146,651,50 


172,473,124] 


198,014,400] 


155,517,347 


23.72 


1893 


1 157,494,80 


232,420,517] 


213,944,400] 


137,952,690 


26.49 


1894 


1 181,567,80 


227,921,032 


212,829,600] 


113,095,788| 


32.56 


1895 


1 199,304,10 


231,087,438 


216,292.500] 


121,610,219] 


31.60 


1896 


1 202,956,00 


0] 195,899,517 


213.463,700] 


153,395,740) 


30.32 


1897 


1 240,000,00 


0| 


5?12,000,0001 


1 





Coinage not attainable prior to 1873. 



Table W— PRODUCTION and COINAGE: of GOLD and SIL- 
VER ill the UNITED ST A TES. 



Year. 



GOLD. 



SILVER. 



Production. 



Coinage, 



Production. 



1792-18341 


14,000,000|? 


1834-18441 


7,500,000| 


1845 1 


1,068,327| 


1846 


1,189,357| 


1847 


889,085| 


1848 


lO.OOO.OOOJ 


1849 


40,000,000 


1850 


50,000,000 


1851 


55,000,000 


1852 


60,000,000 


1853 


65,000,000 


1854 


60,000,000 


1855 


55,000,000 


1856 


55,000,000 


1857 


55,000,000 


1858 j 


50,000,000 


1859 


50,000,000| 


1860 


46,000,000 


1861 


43,000,000 


1862 


39,200,000 


1863 


40,000,000 


1864 


46,100,000 


1865 


53,225,000 


1866 


53,500,000 


1867 


51,725,000 


1868 


48,000,000 


1869 


49,500,000 


1870 


50,000,000 


1871 


43,500,000 


1872 


36,000,000 


1873 


36,000,000 


1874 


33,500,000 


1875 


33,400,000| 


1876 


39,900,000 


1877 


46,900.000 


1878 


51,200,000] 


1879 


38,900,000 


1880 


36,000,000 


1881 


34,700,000 


1882 


32,500.000 


1883 


30,000,000 


1884 


30,800,000 


1885 


31,800,000 


1886 


35,000,000 


1887 


33,000,000 


1888 


33,175,000 


1889 


32,800.000 


1890 


32,845,000 


1891 


33,175,000 


1892 


33,000.000 


1893 


35,955,000 


1894 


39,500,000 


1895 


1 46.610,000 


1896 


1 53,088,000 



15,799,9O0.O0|Insignificant || 
28,790,000.001? 250,000| 



3,756,477.00 
4,034,177.001 
20.202,325.00! 
3,775,512,50| 
9,007,761. .50j 
31,981,738.50j 
62,614,492. 50| 
56,846,187.50| 
39,377,909.001 
25,915,962.501 
29,387,968.00| 
36,857, 768.50| 
32,214.040.00j 
22,938,413.501 
14,780,.570.00j 
23,473,654.00| 
83,395,530.00| 
20,875,997.50| 
22,445,482.00| 
20,081,415.00j 
28,295,107.50] 
31,435,945.00] 
23,828,625.0(?] 
19,371,387.50] 
17,582,987.50] 
23,198,787.50] 
21,032,685.00] 
21,812,645.00] 
57,022,747.50] 
35,254,630.00] 
32,951.940.00] 
46,-579,452.50] 
43,999,864.00] 
49,786,052.00] 
39,080,080.00] 
62.308,279.00] 
96,850,890.00] 
65,887.685.00] 
29,241,990.00] 
23,991,756.50] 
27,773,012.50] 
28,945,542.00] 
23,972,383.00] 
31,380,808.00] 
21,413,931.00] 
20,467.182.50] 
29,222,005.00] 
34,787.222.501 
56,997.020.001 
79,546,160.00] 
59.616,3.57..50| 
47,053,060.00] 



50,000] 
50,000] 
50,000] 
50,000] 
50,000 
50,000) 
50,000] 
50,000 
50,000] 
50,000] 
50,000] 
50.000] 
50,000] 
500,000] 
100,000] 
150,000) 
2,000,000] 
4,500,000] 
8,500,000] 
11,000,000] 
11,250,000) 
10,000,000) 
13,500,000] 
12,000,000] 
12,000,0001 
16,000,000| 
23,000,000] 
28,750,000 
35,750,000] 
37,300,000) 
31,700,000] 
38,800,000) 
39,800,000] 
45,200,000] 
40,800,000) 
39,200,000] 
43,000,000] 
46,800,000] 
46,200,000] 
48,800,000] 
51,600,000] 
51,000,000] 
53,350,000) 
59,195,000 
64,646.000J 
70,465,000] 
75,417,000) 
82,101,000) 
77,576,000| 
64.000,000] 
72,051,000] 
76,069,000] 



Coinage. 
"3876697100:00 
24,961,600.00 
1,873,200.00 
2,558,580.00 
2,374.450.00 
2,040,050.00 
2,114,950.00 
1,866,100.00 
774,397.00 
999,410.00 
9,077,571.00 
8,619,270.00 
3,501,245.00 
5,142,240.00 
5,478,760.00 
8,495,370.00 
3,284,450.00 
2,259,390.00 
3,783,740.00 
1.252,516.50 
809,267.80 
609.917 10 
691. ^vJO.OO 
982,409.25 
908,876.25 
1,074,343.00 
1,266,143.00 
1,378.255.50 
3,104,038.30 
2, 504,465. JO 
4,024,747.60 
6,851,776.70 
15,347,893.00 
24,503,307.50 
28,393.045.50 
28,518,860.00 
27.569.776.00 
27,411,693.75 
27.940,163.75 
27,973,132.00 
29,246,968.45 
28,534,866.15 
28,962,176.20 
32,086,709.90 
35,191,081.40 
33,025,606.45 
35,496,683.15 
39,202,908.20 
27,518,856.60 
12,641,078.00 
8,802,797.30 
9,200.350.85 
5,698,010.25 
23,089,889.15 



LIBRARY OF CONGRESS 



012 820 611 5 # 



The Economic Balai 



between the VALUE or purchasing pow^ 
of Money, and the PRIOB or debt payin^ 
power of property, must be maintained or 
the normal development of the race can 
not proceed. 

Under the present system of indivia- 
ual ownership and competitive effort, if 
the production of money is restricted, 
WAR, with all its devastation, FLOODS 
that sweep our garnered treasures in chaos 
to the sea, HUj^RIOANES that wreck on 
every hand, together with the all consum- 
ing tongues of FIRS that obliterate a city 
in an hour, all become the providential 
friends of the idle masses, for they create 
a void which their p»-H filing energies may 
be employed to fill. 

With a short supply of money all can- 
not work without (destroying the price of 
existing wealth, and the , poorly equipped 
are forced into idleness. In i*ecent years 
ENFORCED IDLENESS has caused a 

of pot quivalent to that 

ui lae Chicago nre m every pi 
all borne b}'' those who can 
and all because of the insatic 
few, aaid the ignorance of the ma^ 
the facts and principles in r stem - . 



i Tn»>v/"v v% r> 



y. 



THE AUTHOR 



